Energy tightening endangers business evasion, inflation promotion, experts say

Warnings from the Energy Regulatory Office for Expensitation of Electricity would endanger local businesses and force them to move to other countries, Online Economics, economics expert, says. Periscope.

In addition to the possibility of leaving businesses from Kosovo, economists say that expensive electricity could also create market disorder and promote inflation.

Economics Professor Muhamet Mustafa calls ZRE's warning surprising, so it requires that relevant actors see domestic reserves and avoid such expensiveness.

It considers that such expensiveness can have serious consequences in the local economy.

And I'm telling you the right warning is surprising, I haven't expected that there's going to be such an increase, 15 percent is too high, given the overall performance that they're on the world market, but also the fact that the energy that sells the most over 80 percent comes from domestic production, where prices are very convenient and give a basis to distribution and supply to be maintained at reasonable prices. I'm afraid that at these prices there will be a disorder and an incentive of inflation, and I guess there's a huge space that ZRE along with other actors in the chain that create in energy to see domestic reserves and avoid such expensive”, Mustafa says, while denying government claims that “rymma in Kosovo is the cheapest in the region”.

Of course, those who come in every investor see what the price of energy is. Although we say we are at the freest price in the region, that is not correct, even if we are cheaper is because KEK sells it very cheaply, energy sells it very cheap to KEDS and KESCO. With this high fee we're compared to European countries not only to the region, but until you've assured people, you haven't provided them with infrastructure, you're punishing a part of the population that should definitely use the heating current, you're punishing it at high energy prices, and you're risking it to the standard”, Mustafa said.

That costing energy can bring consequences to Kosovo businesses, says university professor Artan Nimani, especially because of the high trade deficit.

“We have previously raised concerns about the government's silence in relation to the demands of economic operators for priceling electricity in the name of annual revenue regulation, and this will undoubtedly cause a series of concerns not only of individual consumers but also of businesses and in the first place in manufacturing businesses which we are also in commercial disbalancing, and this could negatively affect the decision not to operate in Kosovo and move to a more appropriate environment where the climate of business has been made, says Nimani.

“The fact of continued demand for an increase in the price of electricity for nearly four years, we have an increase of over 130 percent of the price of electricity, it's really unaffordable, it's disturbing, and even its impacts will be extremely negative, not only in the family, but also in the entire economic system of the country”, Nimani says.

He says that from the expensive energy, businesses in Kosovo will leave in the countries of the region.

This is the problem. The government must create favourable conditions for doing business and not discourage companies from leaving the country. We have dozens of cases that companies from Kosovo have moved to northern Macedonia and Albania, precisely because of the business climate. I know dozens of business people who are considering the possibility of getting out of Kosovo territory to do business with their activities. This has direct consequences”, Nimani said.

Currently, for consumers who spend up to 800 kilowatts per hour within a month, the daily electricity price is 7.79 cents per kilowatt. In the event of expensive 15%, they would pay 8.96 cents. The ZRE examines and sets electricity tariffs annually, and they are in effect from April 1st to March 31st next year.