THE PRICE OF ELECTRICITY FOR THE ECONOMY WILL SOON GO UP TO EUR 120 PER MEGAWATT HOUR

The Government of Serbia will soon announce to the public the decision on a new increase in the price of electricity for the economy from EUR 95 to EUR 120 per megawatt hour, reports Demostat.

According to this research and publishing center, the new price will be announced well before the calendar end of the current year. According to the opinion of the expert public, this will represent a new blow to the economy, especially that part of it that is completely dependent on electricity in terms of production, and as usual, consumers will pay for it, who will face higher prices for products and services.

The increase in prices will lead to a new inflationary blow that will further lower the already low standard of living of citizens in crisis conditions, caused by the corona virus epidemic and the Russian military intervention in Ukraine, according to Demostat.

As a reminder, on August 30, the Government of Serbia announced that the price of electricity for the economy, supplied by Elektroprivreda Srbije (EPS), will jump from EUR 75 per megawatt hour to EUR 95 per megawatt hour.

Although in Serbia electricity prices for the economy, unlike those for citizens, which are regulated, are formed on the free market, the government decided to intervene in crisis conditions in November last year when EPS, which is owned by the state, was ordered not to changes the contracts of all business clients whose contracts expire in that month.

The same decision was extended to December, after which it was stipulated that the price of electricity for the economy would be EUR 75 per megawatt hour. That price was current until September 1, when it came into force in the amount of EUR 95 per megawatt hour.

As Demostat learns from sources close to the Government of Serbia, the goal of the authorities is to raise the price of electricity for the economy in stages in a total amount of 70%.

Energy analyst Velimir Gavrilović has no doubt that the economy will react to the increase in the price of electricity in any other way until the price of its products increases.

– There are many industrial companies that use electricity in their production process. From bakers to foundries and ironworks. When the price of the electricity they use increases, these companies have no other option but to increase the price of their products. Therefore, due to the increase in the price of electricity for the economy, citizens will pay more for the products they need, and inflation will increase – Gavrilović assessed.

According to him, not everyone in the economy will be able to withstand the increase in the price of electricity, so some companies will fail and go bankrupt or bankrupt, while others will have to send their employees on forced leave.

Energy expert Vojislav Vuletić believes that in the specific situation where the price of electricity is rising, there are no conditions for the economy to reduce its expenditures, and he also points out that the price increase of products is inevitable.

– We are in a situation where Serbia does not produce enough electricity for its own needs. Accordingly, we are forced to import electricity from abroad, and that costs money. Therefore, it is logical that the price of electricity is rising, and the economy will have to respond to it by increasing the prices of its products. In this way, the burden of rising electricity prices will be passed on to customers, and inflation will rise – said Vuletić.

E2 portal (Beta)


Source: E2 Portal by www.e2.rs.

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