Bosnia’s Federation Hikes Natural Gas Distribution Price by 29%

The price hike is effective retroactively as of November 1, the Federation government said in a statement following a regular meeting.

The price for end consumers will rise by a little less than 29% as a result, the spokesperson of Bosnia's leading gas distributor Sarajevogas, Adis Salkic, told SeeNews.

The Federation is one of the two autonomous parts of post-war Bosnia, forming two-thirds of its population and economy. The other is the Serb Republic.

Officials at the Serb Republic Ministry of Economy, Energy and Development were unable to give on Wednesday any details about gas distribution prices and policies in that part of Bosnia.

“The main reasons for the rise are the enormous growth of the price of Russian natural gas and the increase in transportation costs through Hungary and Serbia,” the Federation government said.

Bosnia currently gets its natural gas, all of it originating in Russia, via a single pipeline coming from its eastern neighbour Serbia. The country is a relatively small consumer and imported 320 million cubic metres of the fuel in 2007. Consumption is projected at 340 million cubic metres for this year and 360 million cubic metres in 2009.

"We have not yet received official government information for the gas price hike. But following the decision, the prices for our three categories of clients - households, small consumers and large industrial consumers - will definitely go up," Salkic said. The state-owned company is one of the biggest natural gas buyers in Bosnia, together with alumina plant Birac and steel foundry Arcelor Mittal Zenica.

Last month, Bosnia's gas transmission monopoly BH Gas urged the government to raise the price of natural gas for households to reflect international market rates if major pipeline projects in the country were to be financed.

BH Gas’s managing director Almir Becarevic said earlier that 1,000 cubic metres of Russian gas cost around $500, or some 720 Bosnian marka, whereas gas is distributed in Bosnia at 620 marka per 1,000 cubic metres.

He said BH Gas has drafted projects to build new pipelines that would bring the fuel from Croatia in the north (near Bosanski Brod), the west (near Bihac) and the south where a connection was possible to the planned Adriatic-Ionian pipeline, again on Croatian territory.

(1 euro = 1.95583 Bosnian marka)