Electricity

Serbia won’t cap electricity prices in response to energy crisis – prime minister

Serbia will not limit electricity prices due to energy crisis - prime minister

Photo: Erich Westendarp from Pixabay

Published

October 18, 2021

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Published:

October 18, 2021

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Prime Minister of Serbia Ana Brnabić has said the government would not cap the prices of electricity as requested by the business sector, and state-owned power utility Elektroprivreda Srbije (EPS) announced it cannot offer dumping prices and distort competition. However, the company revealed it could offer companies more adequate prices if the government adopts such a decision. Earlier, the Serbian Association of Employers demanded the price increase to be gradual.

The businesses sector sounded an alarm in early October amid a spike in power prices. The association said electricity suppliers have boosted tariffs by 70 to 135 percent and warned that companies would be forced to increase the prices of their products and lay off workers. Electricity prices for companies in the region are currently as high as EUR 160 or about a hundred euros more than in March and April.

Some European countries, such as Bulgaria and Romania, have announced measures to help companies.

Čadež: Limit electricity prices

Marko Čadež, President of the Serbian Chamber of Commerce, earlier said domestic companies are struggling to maintain their operations and provide raw materials. He proposed supplying the economy with electricity from domestic sources at limited prices as a transitional solution.

The Serbian Association of Employers then urged the government to tackle the drastic increase in electricity prices, arguing it would lead to an increase in the prices of their products and services, and at the same time endanger a significant number of firms. The association proposed a gradual increase, over a longer period, and pointed out 46 percent of the electricity bill accounts for various taxes and levies, while that the rest is energy.

Brnabić: Prices will not be restricted because Serbia has a liberalized market

Prime Minister Ana Brnabić said the country has a sufficient supply of electricity and gas.

She said electricity tariffs in Serbia are still much lower than in Europe, but also warned prices would be under pressure.

The corporate sector demanded a cap on the price of electricity, but it is impossible, because Serbia has a liberalized market, Brnabić said.

Brnabić added her government is preparing measures to ensure energy security in the long run and that they would be announced this week.

Mihajlović: EPS will discuss prices individually with companies

Zorana Mihajlović, Deputy Prime Minister of Serbia and Minister of Mining and Energy, said the government would do everything it takes to secure energy stability during the global energy crisis. EPS and state-owned gas supplier Srbijagas will negotiate the prices for companies on an individual basis, Mihajlović said.

EPS: the law obliges us to do business in line with market rules

Elektroprivreda Srbije (EPS) said it understands the needs of the industrial consumers, but that it is obliged to pursue a market-based and transparent and non-discriminatory approach that is in line with trading on European power exchanges.

EPS noted the market for industrial consumers was liberalized in 2014 and that it must act in line with market regulations like all other suppliers. The utility said it could be penalized if the regulators determine it gave dumping prices to its customers.

However, EPS said the government could allow it to offer more adequate prices to companies during the global energy crisis.

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