The debt of Elektroprivreda Srbije (EPS) increased by 50 percent in the three quarters of 2022 and exceeded 1.5 billion euros, it was stated in the text Effects of the global energy crisis on the operations of Elektroprivreda Srbije (EPS), Srbijagas, Elektromereza Srbije (EMS) and Transportgas in the context of budget risk, published in the latest issue of the journal Macroeconomic Analysis and Trends (MAT).
“From May 2021, the liquidity of EPS has been continuously deteriorating due to the reduced operation of hydroelectric power plants, and later the import of electricity at record high market prices, low prices for guaranteed supply,” according to the text by Edvard Jakopin and Nataša Chokorilo.
EPS, as stated, almost exclusively financed the import of electricity by borrowing, and in the first nine months of this year, the company made a loss of 678 million euros.
According to that analysis, EPS had a profit of 110 million euros in 2020, and a loss of 127 million euros in 2021.
In the fourth quarter of 2021, that company bought 1,244 gigawatt hours (GWh) of electricity on the market at an average price of 233 euros per megawatt hour (MWh), which cost it about 290 million euros. This year, until September, a total of 2,907 GWh was procured at an average price of 254 euros per MWh, which cost about 740 million euros.
“EPS sold the purchased electricity at a four-five times lower price on the domestic market,” it was stated in the text.
The analysis showed that Srbijagas’ problems with gas supply began in the 2021-2022 heating season. and they escalated with the outbreak of the crisis in Ukraine. In that heating season, a large budgetary expense was incurred, as an intervention from the budget of around 500 million euros was necessary, which is one percent of the gross domestic product (GDP).
Comparative analysis shows that European countries fared relatively better, the impact of the gas crisis on their budgets ranged from 0.5 percent to 1 percent.
At the end of 2021, the total liabilities of Srbijagas increased by 72 percent and reached 1.3 billion euros, but the profit in 2021 was 32 million euros.
In December 2021, the Government of Serbia froze domestic sales prices of gas, and transferred all losses of Srbijagas to the budget.
In the 2021/2022 heating season, gas worth 1.09 billion euros was purchased and sold for 604 million euros, which means that the negative effect of the increase in gas import prices is 486 million euros, which is also a direct budget cost.
Assuming the same purchase prices of gas as in the fourth quarter of 2021, 1.4 billion euros will be needed for the purchase of gas in 2022, and the revenue from sales would be twice as low, 720 million euros, so the budget cost of the increase in the price of gas throughout 2022 amounted to 557 million euros.
Joint-stock company EMS operates continuously positively and does not pose any risk to the budget. In 2021, EMS achieved a record profit of 20 million euros, and in 2022, only for the first six months, 32 million euros.
Transportgas operates, as stated, continuously positively and does not pose any risk to the budget. The profit in 2021 and 2020 was above 20 million euros. The liabilities of that company increased in 2021 from 13 million euros to 60 million euros, which is a real growth of 319 percent, but in the first three quarters of 2022 they were halved in real terms and amount to 33.5 million euros, Beta writes.
