November 1, 2019 / 9:32 AM / a month ago

Serbia to raise household energy tariffs for first time in over 2 years

BELGRADE, Nov 1 (Reuters) - Serbia will increase household energy tariffs next month for the first time in more than two years, and by 3.9%, the Energy and Mining Minister said on Friday. The International Monetary Fund said in its October review of a 30-month non-financial and advisory deal with Belgrade that a “thorough assessment of electricity tariffs is warranted to ensure full cost recovery”.

Aleksandar Antic said the increase is the smallest possible and there has been no adjustment to inflation for the past two years. He said the tariffs for industrial consumers would not be changed.

In 2016 Serbia increased retail electricity prices by 3.8%, a rise of about half the level demanded by the IMF in return for a 1.2 billion euro ($1.34 billion) loan.

Successive Serbian governments, determined to keep electricity prices low to avoid public discontent, have heavily subsidised state-run power utility EPS. But low prices and huge losses in transmission have crippled investment.

EPS produces all of Serbia’s annual consumption of around 38 gigawatt hours, more than two-thirds of it from coal-fired plants and the remainder from hydro power plants. ($1 = 0.8965 euros) (Reporting by Maja Zuvela; Editing by Susan Fenton)

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