The anticipation of lower energy prices in Serbia has sparked debates on whether this will lead to a reduction in prices across various sectors, as basic economic principles suggest. Authorities have announced forthcoming reductions in electricity by 25% and gas by 15% starting May 1. While it seems logical that decreased energy costs should translate into lower prices for goods and services, history suggests otherwise in Serbia.
Entrepreneurs are already offering explanations for why they may not lower their prices despite the reduction in energy costs. Some cite high inflation rates, arguing that other factors offset the decrease in energy prices. However, consumer associations view this as a cynical stance, accusing businesses of maintaining double standards in pricing.
Goran Papović, president of the National Consumer Organization of Serbia, highlights the disconnect between the reduction in energy costs and actual price reductions by businesses. He emphasizes that while economic logic dictates a corresponding decrease in prices, this often fails to materialize in Serbia. Papović calls on entrepreneurs to show responsibility and goodwill towards consumers by voluntarily reducing prices.
Vesna Perinčić, President of the Board of Directors of the Republican Union of Consumers, acknowledges the correlation between energy prices and overall costs but doubts that businesses will pass on the savings to consumers. She attributes this reluctance to a lack of competition in the market, resulting in high profit margins and resistance to price reductions.
Economic analyst Branko Pavlović suggests that businesses in Serbia may choose not to lower prices to compensate for past losses or to maintain profitability. He highlights the absence of real competition in the market, which allows businesses to maintain higher prices despite changes in input costs.
Overall, while the reduction in energy prices presents an opportunity for businesses to lower costs and increase competitiveness, the reluctance to do so highlights broader issues within the Serbian market, including a lack of genuine competition and adherence to basic economic principles.
