Power prices set to increase for business consumers

TIRANA, Sept. 4 – 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,” said Energy Minister Damian Gjiknuri in a press conference this week, 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.
ERE officials say they will continue applying the two-tier price level even for this year, under which Albanian households will pay 7.7 lek/kWh for a consumption of up to 300 kWh a month and 13.5 lek for each kWh they consume above the 300 kWh threshold (VAT excluded). Average tariffs for business consumers vary from 8.5 lek/ kWh to 10 lek kWh based on low or medium voltage power access. Meanwhile, state institutions pay 11.5 to 14 lek kWh.
Power prices during the past six years have increased by 63 percent climbing from an average of 5.71 kWh in 2005 to 9.53 lek kWh currently.
Albania’s household electricity prices are higher than in six European countries, although the country’s GDP per capita, an indicator of the standard of living, is among the lowest in Europe, according to data by Eurostat, the statistical office of the European Union. At Euro 11.5 per 100 kWh, Albania’s household electricity prices including VAT at 20 percent, are higher than in Serbia at Euro 6.1, Macedonia at Euro 7.8, Bosnia and Herzegovina at Euro 8, Bulgaria at 8.8 Euros, Montenegro at 10.5 Euros and Iceland at 10.9 Euros.