Natural gas
Natural gas prices, as well as the prices of services provided by energy entities while performing energy activities are not regulated, unless it is prescribed otherwise by the the Energy Law.
Natural gas transmission and distribution use-of-system charges, prices of access to natural gas storage and natural gas public supply prices are regulated.
Natural gas public supply represents the sale of natural gas to households and small customers at regulated prices. All final natural gas customers are entitled to select their supplier in the market, while only households and small customers are entitled to public supply (households and small cusomers can both exercise that right and select an electricity supplier in the market).
Graphic review of regulated and non-regulated prices for final natural gas customers are available
here.
Price regulation in the natural gas field is organised in line with the following principles:
Price regulation should provide a regulated company with a possibility to accrue revenue from regulated activity which will cover justified costs of its operation (operational costs and assets costs). Justified costs include the costs which are necessary and inevitable (including a certain yield from money and investments placed efficiently) so as regulated activity could be performed in a secure manner and in a quality manner. The coverage of justified costs is crucial for the provision of short-term security of supply (via adequate maintenance and overhauls of existing infrastructure), as well as for the provision of long-term security of supply (via timely investments in development and capacity building, in order to provide infrastructure corresponding to the consumption growth forecast). This enables sustainable natural gas sector development.
Economic and energy efficiency are enabled by:
- control of costs justifiability in energy entities and of their development plans (technical efficiency) and
- optimum tariff structure (allocation efficiency)
Techical efficiency implies that the energy activity is performed with minimum costs which provided for maximum reliability of system operations, both in short and long term.
Allocation efficiency implies that the prices give economic signals to customers (for optimum use of natural gas, storage services, transmission and distribution services) as well as to the owners of existing infrastructure and the one to be built in the future (for the maintenance of existing infrastructure and the cosntruction of new one). Allocation efficience is aimed to maximise social welfare, i.e., the optimum ration between the welfare of customers and the profit of an energy entity.
The non-discrimination principle implies that regulated prices provide for an equal treatment of the same customers’ category and group and system users in terms of the procedure for the establishment of regulated prices, regardless of the size, ownership and other characteristics of customers and system users as well as the prevention of mutual subsidising between some customers, customers’ categories and groups or system users and between some activities performed by energy entities.
The principle of efficient regulation implies minimisation of Agency’s costs arising from the implementation of price regulation, as well as of costs with regulated energy entities arising from compliance with the commitments prescribed by regulatory mechanisms and procedures.
Transparency principle in price regulation implies that the Agency will make methodologies for setting regulated prices and decisions on approvals of documents on regulated prices adopted by energy entities public (Official Gazette of the Republic of Serbia, Agency website) as well as other pieces of information on regulated prices. In addition, the Agency encourages transparency in price regulation via public consultations on the drafts of methodologies setting regulated prices.
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