Business community worried over expected increase in power prices

TIRANA, Sept. 17 – With electricity prices set to increase for business consumers next year, the Konfindustria Association has warned the move would have a severe impact on the ailing Albanian economy.
In a statement, the Konfindustria association says an increase in electricity prices at a time when around half of the electricity fed into the grid is lost because of technical reasons and non-payments, risks further deteriorating the country’s economic development and the financial situation of the electricity generation and distribution operators because of the massive culture of non-payment of bills.
“The consequences of increase in electricity prices will only affect businesses and honest citizens, increasing the risk of non-payment of bills, raising production and service costs for domestic industries, lowering their market competitiveness and posing a bankruptcy risk which is a direct blow to the country’s attractiveness of investors,” says Konfindustria.
Electricity prices are set to increase next year as part of a reform to reduce the deficit in the energy sector but the Albanian government has assured the increase will not affect household consumers.
“I would like to stress that household consumers as well as consumers in need will be protected,” Energy Minister Damian Gjiknuri has said, hinting that the price increase will affect business consumers and state institutions considering that no price increases have been applied in the past four years.
Gjiknuri said the price increase is a result of mismanagement in the electricity sector, but even the sale of some public hydropower plants by the previous government.
The increase in electricity prices has also been recommended by the IMF and the World Bank which are assisting the Albanian government bring back the economy to sustainable growth after moderate growth of around 2.6 percent 6 percent annually during the 2009-2013 crisis years compared to a pre-crisis decade of an average 6 percent, when it was one of the best performers in the region, according to INSTAT.
The energy regulator ERE had previously warned the two-tier billing system could be lifted by the end of this year and unified prices be set for all household consumers. The reform would affect around 80 percent of household consumers who consume up to 300 kWh/month and are charged at lower tariffs.