Serbia will pay in full for the gas shortage and the Russian price

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Although we received guarantees from the President of Serbia, Aleksandar Vučić, that we have a friendly price for gas, and that the reserves are at a historic maximum, citizens are already worried about whether they will sit in cold rooms for the winter. Gas has risen in price by nine percent since August 1, and neither experts nor observers of events on the world energy stage know what the price will be in the winter. What is certain is that we will pay for the rest of the gas quotas that we are missing at market prices, which means very expensive.

At the end of May, the President of Serbia, Aleksandar Vučić, boasted to the public that Serbia had received a “friendly” price for gas and underlined that it will be lower compared to other countries that use Russian energy sources.

“We agreed that we will sign the contract for three years, not for one month as some predicted. Another important element is that the (oil) formula will remain the same, so the price will be very favorable for our country”, Vučić pointed out this spring when addressing the public.

The remaining in force of the oil formula means that Serbia will have a fixed price, which will not change due to market “movements”, after which it was announced that the agreed quantity of 2.2 billion cubic meters of gas will be paid between 310 and 408 dollars for 1,000 cubic meters. meters of gas. The agreement officially entered into force on June 1, but the quantity agreements do not cover the planned consumption in Serbia during the heating season.

As the top government predicts, about three billion cubic meters of gas will be needed in the winter months, which means that the difference between the contracted amount (2.2 billion) will be up to three billion, how much we should spend in the winter, i.e. a difference of 800 million cubic meters meters of gas to be purchased on the market where the price is significantly higher and goes up to three or four times more than the price agreed by Serbia.

In practice, this means that the price of gas can go to 1,000 or 1,100 dollars for a thousand cubic meters of gas. This is exactly how much Serbia set aside on average for the required gas quantities in the first quarter of this year. It is important to point out that the market price at the same time next year could be significantly higher, or potentially lower, depending on the conflict in Ukraine, but also on Russia’s attitude towards the EU and the countries of the Western Balkans.

In his last address, Vučić stated that we are at a historical maximum as far as gas reserves are concerned.

“We secured 262 million cubic meters of gas in our part of the warehouse in Banatski dvor, and we bought another 200 million cubic meters, which we stored in Hungary, just for the needs of Serbia,” said Vučić.

Economic journalist Miša Brkić points out for “Nova” that consumers still do not know how much the supplies that President Vučić talked about are sufficient for and adds that such “half information” means nothing.

“When the president already said how much the reserves were, he could have said how long those reserves would last in the winter. Is it the historical maximum for a month or two, or from November 1 to April 1. That kind of manipulation where says that we should not worry because we have enough of everything, it does not necessarily mean anything if it is not put into the context of monthly consumption in the winter months. It is important to be told whether it is enough for households or industry”, says our interlocutor.

He adds that it is half-hearted information that still means nothing and underlines that it would be necessary for the state to transparently explain to the citizens what awaits us in the winter. Commenting on the gas price agreement that was agreed bilaterally at the end of May between President Vladimir Putin and Aleksandar Vučić, Brkić points out that it is to be expected that this agreement will be implemented, i.e. that Serbia will receive 2.2 billion cubic meters of gas per year at a price of 310 to $408 for 1,000 cubic meters of gas.

“The gas market is volatile, prices change every day depending on the geopolitical situation. The fact is that we got a good price, taking into account what the situation was at the time of signing the agreement and how prices move after that agreement. It is undeniable that citizens will pay more for gas, unless the state decides to commit a suicidal act according to which it will deliver the old price to the citizens, and transfer the difference between the old and the new to the budget,” says Brkić and notes once again that consumers must be told how much the new price costs.

Gas has already risen in price, how much it will be in the winter – unknown

The company “Srbijagas” announced that since August 1, the price of gas has risen by nine percent on average, which was justified by the difficult economic and political situation in the world caused by the war in Ukraine.

Energy expert Miodrag Kapor tells “Nova” that he does not expect the Government of Serbia to further increase the price of gas mainly for political and social reasons.

“Of course, this can change if there are significant changes in the world market caused by the aggression against Ukraine, frequent network failures, but also by the crisis in the Far East,” says Kapor in a statement for “Nova”.