Following the end of its visit to Serbia, the International Monetary Fund (IMF) said a revision of the electricity price was necessary “to ensure a full cost recovery”, reiterating its demand for a rise in electricity prices.
Although the mission of the international organization praised the good economic results of the Serbian Government, including growth of 3.5 to 4% by 2020 and low unemployment, the IMF also noted that structural reforms in certain areas are still delayed.
Thus, it has warned in July that reforms aimed at improving the corporate governance of large public companies were “modest” and that plans to change the legal status of Electric Power Industry of Serbia (EPS) into a joint stock company were delayed.
During their each visit to Serbia, the IMF representatives demand, inter alia, an rise in electricity prices, at least in line with inflation, but also in the depoliticisation of EPS and Serbia’s energy policy.
The Government of Serbia has pledged to change the legal status of EPS into a joint-stock company next year, to establish ownership of all EPS assets and to launch a tender for the evaluation of the company’s assets soon.
Although with seven euro cents per kilowatt-hour, electricity in Serbia is among the cheapest in Europe, accounting for about 5% of the home budget, which is one of the highest rates on the continent.
The daily newspaper Blic recently reported that electricity prices will not rise until at least next year, and that the Government of Serbia is postponing the increase by citing arguments that any increase in prices would be a financial blow to households.
A source of Blic from the Serbian Government said there were signals that price adjustments would not happen until the end of the winter season, but that a concrete decision would be made after the New Year.