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Serbia to Raise Electricity Prices in April, Prime Minister Says

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Serbia will raise electricity prices as of April 1, the first increase in a year, with new prices not affecting as many as 1.5 million socially vulnerable households, according to Prime Minister Mirko Cvetkovic.

The government stopped short of endorsing the new price list as of March 1, responding to central bank advice to raise the prices after the end of the first quarter, when inflation, already in the double-digits, is expected to have peaked.

The power monopoly Elektroprivreda Srbije, also known as EPS, can apply 15 percent higher prices to industrial consumers and a 13.5 percent price increase to households consuming more than 350 kilowatt-hours per month as of April, after the winter season ends, Cvetkovic told lawmakers in parliament today.

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“For around one million or 1.5 million households consuming less than 350 kilowatt-hours per month, prices will remain the same,” Cvetkovic said.

Even after the price increase, electricity prices in Serbia of 4.8 euro-cents per kilowatt-hour will remain the lowest in the region, Energy Minister Petar Skundric said, adding that consumers are paying 6.9 cents in neighboring Montenegro, 8.1 cents in Albania, 8.2 cents in Bulgaria and as much as 15.63 cents in Hungary.

“Let me tell you that EPS is not a loss-maker, so you can realize that EPS is responsible and bearing the brunt of welfare spending because it helps families and also companies to be more competitive,” Skundric told parliament.

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Serbia has traditionally treated electricity and gas prices as a social, rather than economic category, especially in pre- election years.

The ruling coalition of Democrats, Socialists and technocrats, which has a one-seat majority in the 250-seat parliament, was close to collapsing earlier this month, when Cvetkovic launched procedures to fire his deputy Mladjan Dinkic.

Leaders of the ruling coalition, including Dinkic, are expected to agree by the end of the month the reshuffle of Cvetkovic’s cabinet, a year before general elections in 2012. Opposition parties have called for early elections.

Serbia, the biggest republic of the former Yugoslav federation, expects to see its economy growing three percent this year, nearly double its 2010 growth rate. A three percent contraction in 2009, the year when Serbia felt the pinch of global recession, has left at least 200,000 people out of work.


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