Possible stream extension with “domino effect” in the economy

From next month, the current in Kosovo can be expensive by 15 percent. But the chain of expenses would not stop. Businesses, especially producers, would face increased operational costs, forcing them to increase the prices of products and services.

The Kosovo Energy Regulatory Office (ZRRE) warned that, by April, electricity bills could increase by 15 per cent.

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 GER examines and sets electricity tariffs annually, and they are in force from April 1st to March 31st next year.

According to this institution, tariff increases this year are necessary, due to lowering energy production, increased consumption and high dependence on high-priced imports.

Current energy prices

In April of last year, Z The RRE has reduced the price of energy for commercial and industrial consumers by 3%. However, a year ago, in 2023, tariffs have increased by 15% for all consumer categories.

Currently, for consumers who spend up to 800 kilowatts a month, the daily electricity price is 7.79 cents per kilowatt.

For those who spend more than 800 kilowatts, the share on this is estimated at 14.45 cents.

Meanwhile, between 10:00 and 7:00 a.m., the price for kilowatt is 3.34 cents for those who spend up to 800 kilowatts and 6.81 cents for those who spend the most.

Kosovo cannot provide the needed energy for over 1.6 million of its inhabitants only with production from the Kosovo Energy Corporation (KEK).

One of the reasons is decades of thermal power plants “Kosovo A” and “Kosovo B”.

Production also has through renewable but smaller resources.

Insufficient production allows a significant portion of the supply to be provided through expensive imports.

On March 26th, the price of electricity on the Hungarian HUPX Stock Exchange, from which Kosovo imports, was 118 euros for megawatts.

The Effect on Business and Price Growth

Agim Sahin, chairman of the Kosovo Business Alliance, says increasing the price of electricity will increase operational costs of businesses, especially producers.

For example, a company that so far has paid 1,000 euros per month for energy, after spending will pay 1.150 euros, according to him.

Sahin says it would force businesses to increase their product and services prices, making them less competitive in the market.

Moreover, he says, these businesses can also cut jobs to cover additional expenses.

This growth will affect prices of essential products, such as bread, milk, oil, liquids and various services. Businesses are not the main culprits for this increase, the main cause remains the increase in energy price”, Sahin tells Radio Free Europe.

Kosovo, in recent years, has faced a steady increase in product and service prices.

The extension began at the time of the COVIID pandemic-19 in 2020 and took off after Russia began its invasion of Ukraine in 2022.

Other product price increases also warn Gani Durmishi, chairman of the Kosovo Milky Producers and Processors Association.

“... because when electricity is expensive, the price of the ambalming is raised, and the price of milk is raised. And then, when the cost of living expenses increases, workers also demand higher salaries”, he says.

Radio Free Europe spoke to several citizens late last month, when they started talking about potential electricity expensiveness, and most said: “We don't know how we're going to get out of”.

New wave of awards in June?

After the expected price of electricity in April, businesses in Kosovo will also face another significant change after two months.

On June 1st, companies with more than 50 workers or an annual circulation of over 10m euros will have the opportunity to choose their energy supplier and come out on the open market.

The step is part of the liberalisation of the electricity market, but has sparked concerns among business businessmen and organisations, warning of economic disorders and price hikes.

In a proposal for Radio Free Europe on 12 March, Alydin Field, owner of the company “A BPPS” in Prizren, has said that, with the transition to open market, rising prices of products will become inevitable.

This, for the fact that the price for kilowatts cannot be cut below 15 cents, from about 7 cents the company pays for now, according to him.

The “will certainly reflect on the cost of products and services”, said the Field, whose firm operates with 13 companies offering food products and other services.

The American Economic Oda of Kosovo, the Economic Oda of Kosovo, and the Kosovar Business Alliance, which have recommended extending the implementation of the open energy market, arguing that the country is not yet ready for this change.

The ZERE, however, has insisted that it has licensed enough companies for electricity supply and has pledged to monitor agreements between businesses and supply companies on its own, to avoid possible abusese. /rel/