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AERS: LOWER NATURAL GAS PRICES AS OF DECEMBER 2013

BELGRADE, Friday, November 1, 2013.

According to preliminary calculations made by the Energy Agency, natural gas prices for households in Serbia are expected to be lower by 3.2% on average, while for all other customers, average reduction will amount to 3.4% as of December 1, 2013.

The Agency has asked all public suppliers to submit decisions on prices for final customers as soon as possible, so as new prices could be approved upon the analysis of proposals.

AERSThe change in prices will not be followed by the change in gas transmission and distribution use-of-system charges (network charges) which were set in 2011.

PE Srbijagas has informed 33 natural gas public suppliers that the new wholesale price, based on which these suppliers establish public supply prices, will amount to 37.69 RSD/m3, i.e. it will be 3.6% lower than the current price. This change in price arose due to the change in purchase, import price and dollar exchange rate drop.

Pursuant to the Energy Law, through a public tender procedure, the Government of the Republic of Serbia selected PE Srbijagas as a public suppliers’ supplier. Tender conditions prescribe the methodology for the change in wholesale price. This price is no longer regulated and it is set based on supply and demand in the market, through a procedure stipulated by the Law.

Public suppliers may either accept the offer of PE Srbijagas or purchase gas from other suppliers, if they find it more favourable. Thereby, public suppliers’ suppliers are in a position to cover the rational level of their expenses by adjusting their operations to market conditions.

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