The price of electricity for local producers moving to the free market is expected to at least double, which will likely increase product prices, making them non-competitive with imported products in Kosovo and also non-competitive in Europe. Meanwhile, the Energy Regulatory Office (ZRRE) seems encouraged by the recent decision of the second instance of the Commercial Court.
ZRRE warned commercial consumers who have not signed a commercial contract with one of the licensed suppliers that they will be disconnected from the energy network starting August 16.
With the transition to the energy free market for businesses employing more than 50 people or with over €10 million in turnover, the price of energy has, to say the least, tripled.
This is confirmed by the latest bills from KEK, the last-resort energy supplier.
Because the Energy Regulatory Office made this decision without consulting businesses and without their consent, these companies opposed it and took the case to the Commercial Court.
Lawyer Blinera Osmani, who published the Commercial Court ruling for the case she represented, confirmed to the show “Shtylla,” produced by KosovaPress News Agency, that the decision applies not only to the party she represented but to all businesses.
The same was confirmed by lawyer Ardian Bajraktari.
Despite this very important situation for local businesses, and especially regarding the recent Commercial Court decision suspending the transition to the energy free market, the Energy Regulatory Office has not responded.
The increase in electricity prices over the past two months due to ZRRE’s decision has been unbearable for producers.
Kushtrim Ajvazi, representative of the production company “Pestova,” told “Shtylla” that electricity bills have doubled compared to a year ago, creating significant uncertainty for company expenses.
“It has certainly caused uncertainty in expenses because planning shows that electricity costs will increase significantly based on the information we have… We received the KEK bill and see that electricity costs in June have at least doubled compared to June last year. Meanwhile, when we compare the offers for the free market on an annual level, the cost is at least three times what we have paid so far. It is really an unbearable cost for the production sector, especially for our company, and it will force us to increase product prices, because the annual electricity cost will increase by around €400,000 in total company expenses,” says Ajvazi.
According to him, with these electricity prices, they will be non-competitive in various European countries.
“In exports, we are exporting to 23 different countries, including the European Union and regional states, and of course this will make us non-competitive. We have not yet informed our buyers exactly about the billing prices because we also have the obligation to notify them at least three months in advance regarding price changes, but certainly it will not be well-received and may also reduce the quantity sold in exports… The import of products into our country will inevitably increase… Some of the cost will be absorbed by businesses, some by consumers… We have not yet calculated precisely, but prices will likely rise by at least five percent,” emphasizes Ajvazi.
Kushtrim Ahmeti, Executive Director of the Kosovo Chamber of Commerce and Industry, says that the ZRRE decision seriously harms businesses and the country’s economy.
“The ZRRE decision makes local businesses much less favorable compared to large imports. As we know, it is suffocating the entire country’s economy. It loses the ability for current businesses to maintain their workforce, putting many workers and families in economic difficulty, and losing opportunities for investment growth in our country. Many companies had plans to invest and expand their capacities, either in machinery or other centers, or to open new branches in Kosovo. Not only would the company have benefited, but also the economy, citizens, and the state would have gained more tax revenue… Another major risk is that many of these existing businesses risk shutting down or moving their capacities to other regional countries, which is extremely unfavorable for Kosovo… If Kosovo’s Assembly were involved, this process would have been suspended again because there was no preparation for this matter,” Ahmeti said.
The ZRRE decision is also opposed by the opposition. Avdullah Hoti, former Prime Minister and former Minister of Finance, and a deputy from the Democratic League of Kosovo, stresses that the ZRRE decision to open the energy market for businesses has created significant uncertainty in energy supply.
“The ZRRE decision to open the energy market for businesses has created significant uncertainty in energy supply. This situation is incomprehensible. Consultations should have been held, and much preparation should have been made. The decision should have been agreed upon with the business community. The consequences will be significant: departure of existing domestic and international investors, non-arrival of new investors, lack of domestic investments, increased costs for local businesses, loss of competitiveness of domestic products in domestic and foreign markets, increased cost of living for citizens, and increased unemployment. As a result, we will soon see a worsening trade balance as foreign products flood our market. This arbitrary approach by ZRRE, supported by the ‘government of deception,’ only harms Kosovar businesses. I do not know what agenda ZRRE and the ‘government of deception’ are pursuing, but it is certainly not in the interest of Kosovo businesses,” Hoti wrote on Facebook.
However, the second instance of the Commercial Court ruled in favor of ZRRE.
Business representatives have announced further appeals to the Supreme Court and Constitutional Court, requesting ZRRE not to implement this decision until the legal disputes are resolved.
ZRRE, however, warned commercial consumers without contracts with licensed suppliers that they will be disconnected from the energy network starting August 16.
Official figures show that electricity prices for businesses in Kosovo are much higher compared to neighboring countries and beyond.
The price per megawatt for businesses in Kosovo is over €200. In North Macedonia, it is €110; in Montenegro, €110; in Serbia, €159. In European countries, for example, in Germany, the price is €182, in Switzerland €150, Austria €170, France €160, while Croatia has much lower prices at €120.
Comparing Kosovo’s electricity prices with North Macedonia, Kosovo is about 90% higher, and this percentage is even greater compared to other countries.
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