In the coming year, electricity prices can be expected to rise by five to ten percent, water and communal services by 50 percent each, some products and services on which taxes or excise have been increased by around ten percent, but also some food products such as flour and bakery products by ten to 20 percent, "Vijesti" learns.
Last year, the Regulatory Agency for Energy and Regulated Utilities (REGAGEN) made a decision on approving higher recognized expenditures for the Montenegrin Electric Distribution System (CEDIS) for their account item of 15 percent each in 2024 and 2025.
This caused an increase in the total item on electricity bills of five percent for 2024, which was mitigated by Elektroprivreda by increasing the discount for regular payers. Now the same amount of increase follows for bills from January next year, at the same time EPCG not only can no longer increase the discount on its part of the bill, but is also thinking about increasing its item, which has not been significantly changed in the last 15 years.
REGAGEN is in the process of reducing items for the Montenegrin Electric Transmission System (CGES) on the electricity bill by 5,6 and 1,7 percent, but this would have an impact on the total bill with a reduction of about two percent.
Probably a 10 percent increase in electricity prices
So, from January, there will certainly be an increase in the total price of electricity by at least three to four percent, due to the harmonization of CEDIS and CGES items, if EPCG does not decide to increase its item for the production price of electricity (active energy), which it can independently changes without the required consent of the regulator. If EPCG were to increase its share of the item, the estimated increase could amount to about ten percent, as stated in the Reform Agenda of the Government.
EPCG said last week that they are still analyzing whether they will increase the amount of their item on the account and that it will depend on the market trends in the coming months. The next year is challenging for the energy sector, because due to the completion of the overhaul, the Pljevlja Thermal Power Plant, the largest Montenegrin producer, will not work for eight months, so EPCG will have to borrow electricity to supply its consumers. Current prices on international exchanges are two to three times higher than what EPCG is charging consumers now.
Water prices are up to 50 percent higher
At REGAGEN, which determines justified costs for the operation of Montenegrin waterworks, there is a request for an increase in water prices of up to 50 percent compared to the current one.
The branch collective agreement (GKU) for utilities was signed last year between the Government and the representative trade union. It increases the earnings of employees in water supply and sewerage companies, and thus the expenses of those companies. The increase in labor costs is included in the regulated price of water as justified costs, however, due to the dispute between the water supply company and REGAGEN, the prices for consumers have not been increased for the year 2024, but will be done for the following year.
At the beginning of next year, there will be an increase in the prices of communal services for the removal and deposit of waste from households and businesses, and the demands of the communal companies is to increase this fee by 50 percent. In most cities, the price of this service has not increased since 2020, although in the meantime utility companies have had significant increases in labor and fuel costs.
Necessary rise in utility prices
In 2022, the Constitutional Court annulled part of the Regulation on Closer Elements and Methodology for Pricing Utility Services, which prevented utility companies from increasing the prices of their services.
In July of this year, the Committee of the Utility Industry of the Chamber of Commerce asked the Government to "urgently pass" a new regulation, because as they stated then, "an urgent change to the price list of utilities services is necessary because the utility industry is becoming insolvent and it is a matter of time how long it can last in this state ".
The Ministry of Ecology, Sustainable Development and Development of the North, which is also responsible for the preparation of regulations for communal activities, only a few days ago passed a decision on the formation of a working group that should prepare an amendment to the Law on Communal Activities. The plan is to first amend the Law and only then adopt a new regulation and methodology on determining the prices of communal services, in order to avoid the possibility that the Constitutional Court will once again cancel part of the methodology for calculating prices.
During the formation of the working group, the Ministry invited interested parties to submit comments by November 5 of this year. It is expected that changes to laws and regulations will be adopted by the end of the year, so that the new increased prices for communal services will be applied from the beginning of the next year.
Suppliers announced an increase in flour prices, bakers are still weighing
Due to the rise in wheat prices on international exchanges, as well as the rise in electricity and labor costs, flour exporters and suppliers have announced to Montenegrin merchants that the price of wheat flour will increase.
The prices of some brands of flour in Montenegrin markets will be increased by 1 to 10 percent by November 20, while other suppliers have announced an increase until the end of the year.
The only Montenegrin producer of flour "MonteMlin" said that stock prices have risen a little, but that they have stocks at the old prices and that in the next few weeks, while stocks last, they will not increase prices, which are among the lowest in the region. After that, the prices will depend on the situation on the stock exchanges.
The bakery industry told "Vijesta" unofficially that they had received announcements of flour price increases, but that they had not yet made a decision to increase the prices of their bakery products.
"If flour prices rise in the long term, along with the announced increase in electricity prices and increased labor costs, it is likely that the prices of bakery products will increase in the coming year. We will try to maintain the price for the basic type of white bread", said the interlocutor of "Vijesti".
The increase in prices is also due to the increase in VAT and excise duties
Due to the increase in the amount of VAT on part of services and products, through the "Europe Now 2" program, from seven to 15 percent from January 1 of the following year.
In this way, VAT is increased for hotel services, books and publications, copyrights, services in the field of education, literature and art, tickets for cinema, theater, matches, concerts, use of sports facilities, solar panels and services in marinas.
Amendments to the law on excise duties introduced excise duties of 25 cents per liter of wine, increased the scope of excise duties for juices and beverages containing sugar and sweeteners, and excise duty on fuels for industrial and commercial purposes from the current 25,9 cents per liter to 33 cents per liter. An excise tax on solid fuels (coal, wood, pellets) of 30 cents per gigajoule of gross thermal value was introduced, until now only coal was on the excise list. Electricity has also been introduced into excise products, but excise duty will be paid from the moment Montenegro enters the EU.
Excise duty is included in the VAT calculation base of 21 percent, so 25 cents becomes 30 cents. But this is also part of the basic price that the wine producer sells to the customer, so with the usual trading margins, the final increased price of a liter of wine will amount to about 50 cents per liter.
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