Serbia's Fiscal Council: Electricity price should go up 15-20%

In an analysis on the structural problems of Serbia’s energy sector in the light of the global crisis, the Council said that a price rise was a necessary but an insufficient condition for the recovery of the Serbian power company (EPS).

“Not only would this increase stop the company’s current financial ‘bleeding’ but it is also economically justified – because the current price for households is not at an economically appropriate level and it encourages irrational consumption. At the same time, even with this increase, the price for households in Serbia would remain among the lowest in Europe (along with Georgia and Ukraine),” the Fiscal Council analysis said.

The price increase is not enough to recover EPS, said the Council, adding that other measures would include freezing the total wage bill, control of public procurement and the launching of a series of mid-term reforms.

The way in which EPS has been managed cannot be tolerated, said the Council, adding that losses and electricity theft reached 12 per cent – twice more than in the countries Serbia can compare with.

The Council also addressed the issue of Serbia’s natural gas provider Srbijagas and noted that, in the 2021/22 heating season, EPS and Srbijagas had total losses amounting to approximately one billion Euro.

“The price of natural gas for businesses should go up some 75 per cent, as it did in other Central and Eastern European countries back in the second half of 2021, while the price in Serbia practically remained frozen. Due to such increase in the price of natural gas in the region, maintaining a low price for domestic companies, especially in the exchangeable sector, it economically unjustified,” said the Council, adding that the price of natural gas for households should go up 65-70 per cent.