Price of Electricity for Households in Serbia May Go Up by Year's End

Electricity meters (BETAPHOTO)

The Serbian government has pledged in talks with representatives of the International Monetary Fund (IMF) to further change the tariff system, which could lead to an increase in the price of electricity for households by the end of the year.

According to the IMF, the state should not artificially keep prices low for all citizens, rather it should let the prices on the market motivate people to save electricity.

The international organization's stance is that electricity prices for households must be in tune with the actual costs of production and distribution. The Serbian government, according to a report by the IMF, has announced that it will offer a draft reform of the current block tariffs soon - as early as by the end of August.

Economist Bogdan Petrovic told website Nova that the electricity price hike will come into force by the end of the year, and that it will follow the level of inflation.

"Our government wrote a letter to the IMF, where it pledged to raise the price of electricity. They will have to increase the price of electricity for the population, at least at the level of inflation, by the end of the year at the latest. If last year the price of something went up in September and if the price goes up now, they will be looking at how high inflation was between those two price hikes," said Petrovic. He added that the second electricity price hike will be based on a revision of the block tariff, where the limits of tariffs will probably be narrowed and that will mean an indirect price hike for the citizens who consume a little more electricity.