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Serbia, Electricity will rise in price by another 20 percent in 2023?

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Considering that the Government of Serbia, for the sake of obtaining new loans, reached an arrangement with the International Monetary Fund, households in our country will face two more increases in the price of electricity in the new year, 2023, and the expert public believes that its price will in total increase by about 20 percent.

As is known, the authorities have already allowed EPS to increase the price of electricity for individual consumers by about eight percent from January 1. However, that will not be all when it comes to the coming year because the IMF, as a guarantee that the new loan it gives to Serbia will be repaid on time, demands that the price of electricity be increased two more times, so that there will be enough money in the budget to pay back the loan. If the forecasts of economists are correct, in the next year the price of electricity will increase by a total of almost 30 percent.

The competent authorities are telling the citizens that there is no reason to worry, so Finance Minister Siniša Mali points out that the upcoming electricity price increase in Serbia on two occasions “will be far less than the price increase in Europe”. On the other hand, consumers still worry because the fact is that their incomes are far lower than those of citizens of European Union countries.

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Also, considering the negative effects of the global economic crisis caused by the consequences of the corona virus pandemic and the war in Ukraine, the household budget of most households is already stretched so that any new price increase is quite a problem. Especially, if we are talking about electricity, because the increase in its price causes at the same time the increase in all other prices, including those of the basic necessities of life.

We tried to find out how much the price of electricity will rise and when it could happen according to the calendar.

The Energy Agency replied to us that, as an independent regulatory body, in accordance with the law, it approves price changes for guaranteed electricity supply at the request of the guaranteed supplier, assessing its justification in accordance with the appropriate methodology adopted by AERS.

Dilojt company’s energy expert Željko Marković tells Danas that at the moment it is very difficult to forecast the percentage of electricity price increases in 2023, but he believes that it could most realistically be in the amount of ten percent on two occasions.

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– During the negotiations with the Government of Serbia, the International Monetary Fund clearly presented the percentage of electricity price increases required to maintain the arrangement. Considering the objective situation in Serbia when it comes to the electric power sector, I believe that the new price will be such that it enables the normal functioning of the EPS. I emphasize again that it is too early to give more precise forecasts, but roughly speaking, I do not believe that the individual amounts will be higher than 10 percent – our interlocutor says.

However, he adds that there is room for the percentage increase in electricity prices to be lower.

– If EPS would reduce its costs and operate more efficiently than it was the case in the past period, it would be possible for the percentage of increase to be lower – explains Marković.

On the other hand, the president of the Movement for the Protection of Consumers of Serbia, Petar Bogosavljević, tells Danas that it is unacceptable and unrealistic that electricity will rise in price by the end of the year in a total amount of about 20 percent.

– A price increase in that percentage is completely unsustainable because it will further lower the purchasing power and living standards of citizens. Purchasing power and standards are already at a low level due to current price increases, and the new ones will further reduce them. It is quite clear that this arrangement is to the detriment of the consumer and the only one who benefits from it is the IMF, whose goal is to ensure the orderly repayment of loans. Accordingly, I believe that the Government of Serbia should not have decided to implement such a concept. I am surprised that its implementation was supported by a part of the professional public, including the Fiscal Council. Instead of such a model, which is disastrous for citizens, the Government should have opted for one that would enable cost reduction and rationalization of operations in EPS, as well as for the state to waive part of the budget duties on electricity, Danas writes.
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