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The Government of the Republic of Serbia

In the service of citizens

Electricity prices to increase by 10% as of March 1

Belgrade, 28 January 2010

Minister of Energy and Mining Petar Skundric said today that the government approved the request of the Serbian electric power industry Eletroprivreda Srbije (EPS) to increase electricity prices by 10% as of March 1.

Petar Skundric

Speaking at a press conference held after the government session, Skundric said that electricity prices for households will be increased by RSD 0.59 per kilowatt hour with the VAT tax included in the figure. The price for companies will be increase by 9% and for households by 11%.

He said that the kilowatt hour of electricity now costs 4.5 euro cents and recalled that the electricity prices were last increased on August 1, 2008, by 8.9 % on average.

Skundric said that the decision to increase the prices was made taking into account macro economic stability that was achieved through government measures, EPS´s contribution to that, and the winter season which requires increased electricity consumption.

Skundric called on citizens to save electricity for their own sake and in order to assist the normal functioning of the electric power system.

I think that the price increase that has been established today can be annulled with a rational approach and reduced energy consumption. It should not be difficult to reduce one’s own consumption by 10%, the Minister said.

He pointed out that the price of electricity in Serbia is lower than in other countries of the region, except for Macedonia, adding that electricity is two times more expensive in Croatia, while in Hungary and Slovakia it is almost three times more expensive than in Serbia.

The Minister said that the energy supply in Serbia is stable despite the fact that average temperatures are the lowest they have been in the past 120 years, adding that supply is being maintained amidst record consumption.

He said that district heating systems in Zajecar, Novi Pazar, Trstenik, Majdanpek and a few other cities are in a critical situation.

He said that fuel prices will increase in Serbia because of a fall in the value of the dinar in relation to the dollar and due to a higher crude oil price on the international market, adding that the per litre price of diesel will increase by 3.4 dinar and of petrol by 2.8 dinar.

Skundric stressed that if the price of crude oil and the value of dinar in relation to the dollar stay on current levels fuel prices in Serbia could stay the same or fall by a small percentage at the next price adjustment.

The Minister said that salary increases were not discussed with the trade unions of the Serbian electric power company EPS.

He explained that there is no agreement concerning salary increases in EPS, adding that there was only a discussion about the distribution of a part of the company’s profit as in all other public companies.

He said that talks were held with the trade unions about employee meals and certain benefits for miners who work in hard conditions.

The Minister said that the talks held with the trade unions were perfectly legitimate, adding that he hopes that the continuation of these talks will lead to an agreement based on principles which were agreed on earlier and that the agreement will not jeopardise the country’s macroeconomic policy or destabilise the economy.