Serbian President Aleksandar Vucic, on the air of TV Prva, announced his intention to ask Russian leader Vladimir Putin to keep the reduced gas price in 2022. It is reported by RIA News…
According to Vucic, he wants to discuss the issue with the Russian president during a meeting with him scheduled for November 25, which will be “of decisive importance.”
Vucic explained that Serbia now buys 6.5 million cubic meters of gas daily at the “best price in Europe” of 270 dollars per cubic meter. The corresponding agreement expires at the end of the year. At the same time, as the president noted, now the country is already spending more than this volume, and in winter it will spend 11.5 million cubic meters, sharply reducing reserves.
At the same time, Vucic is not satisfied with the formula proposed by Moscow for calculating the cost of gas. According to it, the price of gas would consist of 70 percent of the price on the exchange and 30 percent would be calculated using the oil formula. In this case, the cost will be $ 790 per cubic meter of gas. However, the Serbian president called such a price unacceptable.
According to the Serbian leader, Belgrade insists on a price based on 70 percent based on the oil formula and 30 percent based on market value. In this case, the price would be $ 510 per cubic meter of gas. “But we can’t pay for that either,” concluded Vucic.
The fact that Belgrade and Moscow are negotiating a new long-term gas contract was announced by the head of the Russian-Serbian Intergovernmental Committee on Trade, Economic, Scientific and Technical Cooperation (IGC) Nenad Popovic.
According to him, negotiations on a new long-term contract between Gazprom and Srbijagaz are continuing at “this very difficult time, when the price of gas soared 10-20 times.” Popovic specified that the discussion will touch upon the issue of direct gas supplies from Russia to Serbia.
Gas talks continued on October 7 between President Vucic and Russian Deputy Prime Minister Yuri Borisov. On October 9, it became known that Serbia is discussing with Russia maintaining the gas price at $ 270 per thousand cubic meters for six months in 2022.
On October 10, Serbian President Vucic, during a joint press conference with Russian Foreign Minister Sergei Lavrov, said that he had asked Vladimir Putin for the cheapest gas at the lowest price in Europe, and also thanked Moscow for ensuring the energy security of his country.
The fact that the EU states are alarmed by the impending energy crisis, Vucic said earlier. He warned that the problem itself would not be solved and that it would not be possible to deal with it quickly. In his opinion, the crisis will last from six months to two years.
In addition, the Serbian leader believes that this will lead to higher prices in various areas, including an increase in the cost of food and building materials. Speaking about the probable causes of the gas crisis, Vucic said that the problem was the erroneous bet on green energy and the refusal of the EU countries to conclude long-term contracts for gas supplies from Russia on time.
The cost of energy in Europe is related to gas prices, which in recent months have been at record levels, several times higher than previous highs. Thus, gas prices in Europe at the October 6 auction approached the level of $ 2,000 per thousand cubic meters. Saxo Bank experts believe that the launch of Nord Stream 2 would help lower prices. If the coming winter is cold and gas supplies do not increase, Europe will face a “dark and expensive time”.
Europe has already had to print its underground gas storage facilities (UGS). As of October 13, European consumers have entered the period of net withdrawal: for the first time since April, gas injection into the EU UGS facilities turned out to be significantly lower than the volumes withdrawn over the last 24 hours. At the same time, the fence began when the storage facilities were only 78 percent full. This indicator became the worst over the past five years.
The International Energy Agency (IEA) has published a report according to which the rise in gas prices in Europe will affect other energy markets as well. Experts believe that high gas prices will lead to additional oil demand of 500 thousand barrels per day: the industry is switching to oil, since it is cheaper than gas. OPEC also announced a likely increase in oil consumption at the end of 2021.