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27 Aug, 2022 22:12

Serbia says Russia saves it from ‘bankruptcy’

‘Fantastic price’ of Russian gas vital for functioning of Balkan state’s economy, president explains
Serbia says Russia saves it from ‘bankruptcy’

Serbs will not have to save energy by reducing their consumption this winter thanks to Belgrade’s policies and natural gas imports from Russia, President Aleksandar Vucic told fellow citizens in an address on Saturday. 

“There are no plans for electricity restrictions next winter,” he said, adding, that the situation in the energy sector remains “extremely difficult.” In addition, the Serbian government is expected to provide “large discounts” to those who did save electricity this year in comparison to the previous one. 

Such measures have become possible particularly due to gas imports from Russia, the Serbian leader said. Belgrade is purchasing 2 million cubic meters of gas – between 63% and 64% of the total required – from Russia, and its total cost amounts to €800 million ($797 million), Vucic said, calling such a price “fantastic.” 

If Belgrade had to buy gas at the current European market prices, it would go bankrupt, he said, arguing that the remaining 1.2 million cubic meters of gas – or around 36% of its total consumption – would cost Serbia €4.8 billion ($4.7 billion) now. “And our entire budget is around €13 billion.”

Vucic also praised a deal Belgrade struck with Budapest that would see Hungary storing between 300 and 500 million cubic meters of gas purchased by Serbia in its gas storage facilities. The Serbian president’s comments come as European gas prices continue to soar. September futures on the TTF hub in the Netherlands rose to nearly $3,500 per thousand cubic meters on Friday, according to data on the London ICE exchange.

The EU is currently trying to resolve its energy crisis, sparked largely by the bloc’s decision to rid itself of Russian gas supplies over the conflict in Ukraine. The EU has called on all member states to reduce gas consumption by 15% to ease the burden of the soaring prices. 

In mid-June, Vucic announced he had agreed a favorable price for Russian natural gas imports under the terms of a new energy deal with Moscow. Serbia was expected to buy Russian gas at a price of between $360 to $410 per 1,000 cubic meters, he said at that time. 

According to the president, Serbia had still incurred significant losses due to EU sanctions on Russia, particularly on oil. Although Serbia is not part of the European Union, the country’s energy supplies transit through EU countries, meaning that any EU sanctions on Russia also affect Serbia. 

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