Novalić: A country that exports electricity must not talk about reductions, raising prices for the economy is a mistake, salvation lies in electricity exports

(Patria) - The session of the SDA Presidency has concluded, and former Prime Minister of the Federation Fadil Novalić specifically spoke about the announced electricity price increases for the economy in BiH.

"In recent weeks, we have witnessed a frantic campaign. Namely, the Electric Power Company (EP) and the Government are informing the public that, due to the fault of previous administrations, they are fighting with all their might and saving us from reductions. That word has not been used since the war until today.

A country that exports electricity cannot talk about reductions. What is really going on? What should have been called the price increase of electricity under this campaign? Why is this being done?

Our EP produces electricity at approximately 60 euros per megawatt, and draws revenue from three sources: one is households, to which it sells 48 percent of electricity, or roughly half, at 32 euros, thus significantly cheaper than the production cost.

The second part, 25 percent, is sold to the economy at an average price of 77.6 euros in 2023. And the third part is exports, about 25 percent, but at prices significantly higher than domestic ones. Today, on the Budapest Stock Exchange, it is 160 euros, and it has been as high as 250," said Novalić.

Thus, by supplying electricity to households, EP BiH indeed incurs losses; by supplying electricity to the economy, it achieves a high profit of 30 percent; and by exporting electricity, it obtains extra profit.

"That extra profit 'smooths out' the subsidization of households with cheap electricity. And whenever you can export electricity at a high price, you can maintain the price.

The times are still bad; we have poor economic parameters for the first time since the coronavirus. It is entirely logical that we must maintain the price of electricity for households. This can be done in two ways: one is to increase production and exports, and use that extra profit to subsidize prices for the population in BiH.

The second, and this is the last resort, is to increase it for our economy, but that is bad, because the economy already pays more.

In order to export electricity, our Government had to ask the Parliament to put blocks 3 and 4 into operation, but we did not have coal for them, because our miners, both five years ago and today, produce five million tons of coal, and that is their capacity.

For export electricity, we had to buy coal from private mines, and that is what the current government suspended, and now it lacks that coal. That is why they talk about increasing the price of electricity, because now it is too late.

And they have now returned to buying that coal, which Aner Žuljević called theft.

And this only leads us to the fact that you do not have to increase the price for the population, but you must absolutely not do it for the economy either, because it will cause a new wave of price increases, as well as layoffs. It will cause a new wave; 30 to 40 thousand workers will be laid off.

Why? Today's electricity price of 160 euros consists of two components: 85 euros is the tax within those 160 euros. If you subtract that, the price that belongs to the company is 75 euros today. Those 85 euros must be paid into the fund for renewable sources.

So, the company receives 75 euros, and our Electric Power Company already sells to our companies at 77 euros. This means it is absolutely unnecessary, impossible, and harmful to increase electricity prices for the economy. The only way out is exports," explained Novalić.