The International Monetary Fund (IMF) revealed that electricity prices in Serbia will increase by 7% starting October, due to losses in the Elektrodistribucija Srbije (EDS) network. Another price hike is expected next year for the same reasons. The government plans to pass the financial burden of inefficient network management by EPS and EDS onto consumers.
The IMF report states that a further regulated tariff adjustment will occur by October 1, 2026, at least matching inflation plus 1%. Fees paid by EDS and EMS to EPS for network losses will also increase from 70 to 80 euros per MWh.
Energy analyst Željko Marković, former EDS director, attributes the delayed price adjustments to political decisions aimed at maintaining social peace. He points out that the maximum allowed revenue (MOP) for EDS has lagged behind inflation, resulting in financial strain and necessitating gradual price increases.
Despite efforts to reduce network losses from 11–13% to a target of 8%, as stated by Minister Dubravka Đedović Handanović, Serbia still faces significant challenges. The government promises major investments in the electrical network this year, the largest in decades.
The IMF highlights that raising electricity prices is vital for the financial health and investment capacity of energy companies. However, the public was not adequately informed beforehand, and official EPS statements earlier in the year assured consumers that prices would remain stable.
Furthermore, the IMF’s forecast on inflation is contradictory: it expects energy price rises to add inflationary pressure in the medium term, despite previously lower energy prices helping to ease inflation recently. This casts uncertainty on achieving the National Bank of Serbia’s inflation target of 3%.
Ultimately, as Marković concludes, Serbian consumers are paying the price for past state mismanagement. Significant reforms and better decision-making are necessary to avoid repeating these costly mistakes.
