Electricity for businesses must increase in price, the government of FBiH will (not) be able to save households

By Ernad Metaj

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Electricity for businesses in FBiH will certainly increase in price, and the FBiH government can do little about it besides adequate subsidy programs. While waiting for the continuation of negotiations between the FBiH Government, employers, and Elektroprivreda BiH, some companies have had to sign contracts for more expensive electricity supply.

- People had to sign because their contracts are expiring. For some, this price increase is up to 112 percent, for most it is somewhat less. We hope that on Monday we will find a solution that no one will be satisfied with, but businesses must be helped, said Adnan Smailbegović, president of the FBiH Employers' Association.

The production price of electricity for Elektroprivreda BiH is currently up to seven times lower than the price at which this energy can be purchased on world exchanges. Theoretically, there would be no need for a price increase if continuous supply from own sources could be ensured, but disruptions occur because, for various reasons, Elektroprivreda has to buy some electricity.

- If we objectively look at the situation, it seems that there are few mechanisms that can stop the price increase, unless Elektroprivreda consciously decides to incur losses. According to my information, Elektroprivreda BiH has already had to buy some electricity on the international market, and whether it will do so again depends on the hydrological situation and coal production, Amer Jerlagić, an expert in the field of energy, told us.

Edhem Bičakčić, president of the Bosnian-Herzegovinian Committee of the International Council on Large Electric Systems (CIGRE), believes that despite the price increase, the situation for businesses is not too alarming.

- We have very few companies whose production process is predominantly based on electricity. For most, the share of electricity is less than fuel, for example, it ranges from five to 10 percent, so even a 100 percent price increase is bearable, Bičakčić believes.

The FBiH Government claims for now that there will be no price increase for households, and our interlocutors believe that a bigger problem lies there. There has long been pressure from the EU not to sell electricity to citizens in FBiH below its production price.

- The time is coming when we must stop buying social peace in this way. The government should create subsidy programs for the socially vulnerable, because we are not all in the same situation. I have a good income and I don't need a subsidy, but it should be provided for those who don't have one. Everything cannot be covered at the expense of businesses, Smailbegović believes.

Employers expect that on Monday a solution will be found to limit the price increase so that prices can be adjusted even for those who have already signed new contracts. How all this will affect the standard of living has not yet been assessed, but it is evident that the trend of price increases in BiH could continue.