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AERS: MORE UNIFORM GAS PRICES AMONGST DISTRIBUTERS ...

Belgrade, May 19, 2009 – Tariff systems for delivery of natural gas to customers connected to the network of 29 Serbian distribution companies came into effect in April this year. Tariff systems for Srbijagas consumers have been in force since October 2008.

After an in-depth adjustment and correction the Agency provided its positive opinion on prices calculated and proposed by distribution companies in accordance with the methodologies and tariff systems. The Government of the Republic of Serbia gave approval to the decision on prices on April 2. Before that, gas pricing for distribution companies was in the domain of local self-governments.

Total charges for tariff customers, split for the first time in use of transport and use of distribution network charges, and calculated and indicated separately, are determined according to tariff systems adopted by the Agency at the end of 2006 and approved thereafter by the Serbian Government.

Separate charges and individual payment of network charges enable natural gas market opening, which means that eligible customers (all customers except households can become eligible) can negotiate their gas price with their present supplier, or they can switch suppliers.

Two and three tariff elements-rates have been introduced for households and other consumers respectively (until today consumers paid gas per cubic metre) to allow aggregated justified costs of all gas sector activities to be fairly allocated to consumer categories.

Customers under the category “households” have the “energy carrier” tariff rate indicated in their invoices in dinar per cubic metre, and the “delivery point” tariff rate in dinar. The last rate consists of (not additional, but existing) costs of retail – contracting, calculation, printing, sending out the bill etc. This amount is charged each month even if no consumption is registered. In addition, other customers have also the “capacity” tariff rate in their invoices to which fixed system costs incurred regardless of the quantity consumed are allocated.

Average gas prices of all distribution companies and for all consumers is somewhat lower than by now. Implementation of tariff systems provides prices to be adjusted much fairer to costs depending on the delivery point (higher or lower pressure) and the manner of gas consumption (uniform or uneven), which results in somewhat lower or higher prices for respective customer categories than by now.

The so called distribution difference (difference between the price of purchasing gas and the average price of selling gas) is lower on average and far more uniform amongst distribution companies than until now. On an average, it amounts to 5,6 dinar per m3 and it is lower in relation to countries in the region.


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