Džindić invites Hadžiahmetović to meeting, who and how much will subsidise gas price increase

SARAJEVO, (Patria) - Minister of Energy, Mining and Industry of the Federation of Bosnia and Herzegovina Nermin Džindić invited the Minister of Communal Economy, Infrastructure, Spatial Planning, Construction and Environmental Protection of the Sarajevo Canton, Enver Hadžiahmetović, to a working meeting at the Government of the Federation of BiH on Monday, 10 January, in order to jointly resolve the issue of gas supply.

As stated in the invitation, he appreciates their efforts to find a solution that would mitigate the impact on users due to the increase in gas prices, but informed the Cantonal Government that the FBiH Government has been continuously dealing with this issue since the beginning of 2021 and that numerous actions have been taken to fully absorb the shock of gas price increases that occurred throughout 2021.

"Also, we express full readiness to consider all possible reserves when it comes to forming the gas price for end consumers, which includes reviewing costs, margins, as well as organisational and personnel optima of cantonal companies," Džindić stated in the letter.

He believes this is a task that needs to be carried out internally and responsibly, and not done through press conferences, and invited Minister Hadžiahmetović to come to the meeting on Monday with appropriate data, and that his associates may also join the meeting if necessary.

Representatives of the Government of the Sarajevo Canton yesterday called on the Government of the Federation of Bosnia and Herzegovina to inform them by Tuesday next week in what way and in what percentage they plan to participate in the gas price subsidy, given that since January the price has increased by almost 15 percent, and since November there was an increase of 23.5 percent.

The Government of the Sarajevo Canton also requested that a way be found to secure gas from other sources, given that Energoinvest informed Sarajevogas that it will not be able to secure sufficient quantities in January and February.

Energoinvest responded today to statements by the Prime Minister of the Sarajevo Canton, Edin Forto, who also raised the issue of costs that Energoinvest calculates and charges a much higher price than what they pay to the Russian supplier.

"Regarding the question of the gas price that Energoinvest has at the entry point into BiH and pays to Gazprom up to the distributor Sarajevogas, it should be known that Energoinvest has costs and pays the following costs: customs clearance and forwarding costs, VAT costs, bank guarantee costs, costs of the transport system operator Gaspromet Pale, costs of the transport system operator Sarajevogas Istočno Sarajevo, costs of the transport system operator BH-Gas Sarajevo. As for Energoinvest's fee, it consists of a fee for exchange rate differences, costs of work of participants in gas operations, and Energoinvest's margin. These items are under the control of the Supervisory Board and the Government of FBiH and the amounts are over three times smaller than those previously charged by BH-Gas. These amounts can absolutely be made available at the planned meeting of the Federal and Cantonal governments, with the confidence that the Government of the Sarajevo Canton takes the same care of the costs and margins of Sarajevogas and Toplane, which are many times higher than those calculated by Energoinvest," the company stated.

When it comes to the increase in gas prices, Energoinvest claims it was inevitable and that the total increase in gas prices by Gazprom since the beginning of 2021 was over 86%.

"Thanks to Energoinvest's business decisions, the switch to the TurkStream pipeline and the reduction of margins previously charged by BH Gas, such a large increase was largely compensated, but all previous reserves have been used up.

When it comes to the stability of gas supply and ordered quantities, Energoinvest confirms that the necessary quantities of gas have been contracted with Gazprom, estimated based on average monthly consumption based on needs expressed by consumers. Overemphasising extreme situations is overcome by usual technical solutions and cooperation among participants in the gas process. Ordering additional quantities is possible, but it should be known that the price of such gas is 4-5 times higher, and solving it through that model is much less rational than the technical optimisation that is usually applied for short periods.

Unfortunately, the expressed readiness to order additional quantities at higher prices has already proven to be empty promises, because Sarajevogas still refuses to pay the bill for such additional quantities when they needed to be ordered due to a breakdown in Bulgaria in November 2021 and for which they agreed in principle that they would pay at any price," they stated.