Serbia's Decision to Ban Natural Gas Exports and What It Means for BiH

(Patria) - The Serbian government has adopted a Decision on the temporary ban on the export and exit of natural gas, which will be in effect until October 31 this year, in order to ensure the secure supply of the domestic market and prevent potential damage to the economy and citizens.

"This decision by the Serbian government will also be felt in the Bosnian and Herzegovinian market, as it prohibits the export, meaning resale, of natural gas via trailers (natural gas tankers), i.e., it prohibits the trade of compressed natural gas from Serbia.

Recently, a number of CNG gas traders have been using the benefits of drastically cheaper natural gas in Serbia. CNG traders, both from Serbia and BiH, have been filling trailers and trading compressed natural gas in the markets of BiH, Montenegro, and Hungary," says Almir Bečarević, a gas expert.

BiH has several CNG gas filling stations and, at the same time, owners of CNG facilities who have used the opportunity to replace more expensive gas in Bosnia and Herzegovina with cheaper gas from Serbia.

"To be more precise, owners of CNG tankers were not filling gas at facilities in BiH, but were doing so in Serbia, and CNG traders from Serbia were using gas prices from Serbia to take over parts of the market in neighboring countries.

All of this was possible because natural gas in Serbia is much cheaper than gas in neighboring countries, so this situation was effectively being exploited in a way that the state of Serbia was subsidizing natural gas that it does not even consume for its own needs, while paying its Russian partner the contractual/economic price.

The Serbian government justified this decision by stating, and I quote: "The decision was made with the aim of preventing the threat of critical natural gas shortages caused by disruptions in the global energy market."

The seriousness of this justification is evident when looking at the weather forecast until the end of the month or the storage capacities that Serbia has secured in Hungary and Serbia (over 500 million Sm3, which is equivalent to BiH's two-year consumption)," said Bečarević.