Bosnia expects a drop in the price of natural gas after signing the new contract with Russia. Recently, skyrocketing prices have prompted many households to switch to heating with wood.

Bosnia fully depends on Russian gas

Bosnia and Herzegovina has a little more than twenty days left to sign a new gas contract with Gazprom. The Russian giant supplies natural gas via the Turk Stream pipeline to both the Bosniak-Croat Federation of Bosnia and Herzegovina and Republika Srpska, the two entities that make up Bosnia and Herzegovina. The Balkan country wants to extend the contract with Russian and hopes to purchase gas at a slightly lower price than the current rate. Bosnia is completely dependent on Russian natural gas arriving via Serbia.

Gazprom last increased prices at the beginning of October. Energoinvest, supplying the Bosniak-Croat entity, had to face a 9.7 per cent increase at the time, while the price of gas supplied to Gas-res in Republika Srpska climbed by 5.04 per cent since then.

Figures from the Agency for Statistics of Bosnia and Herzegovina show that natural gas prices hit record-high levels in the first six months of the year, reaching their highest value since 2015. Companies importing natural gas to Bosnia and Herzegovina are optimistic about the new agreement to be concluded with Gazprom, expecting similar or slightly lower prices for consumers from the beginning of next year.

Energoinvest claims that the volumes booked for this year are absolutely sufficient to meet the household needs in the Federation of Bosnia and Herzegovina, adding that negotiations with Russia on the new contract are in progress. The company promised to inform the public in detail in due time.

„As always when it comes to gas price corrections, we do not wish to make any assumptions in advance,” representatives of the Energoinvest said.

Residents in Bosnia prefer to heat with wood

The price of gas, and its possible decrease, mainly affects residents living in the capital. Homes in Sarajevo are primarily heated or were heated until now with natural gas, but price hikes have prompted many households to switch to heating with wood. A local pensioner revealed that it is nearly impossible to pay all the bills from a pension of just over 200 euros. Adnan Halimic noted that the government always justifies increases in household utility costs with some external factor, first citing Covid, then the war in Ukraine. He complained that he had the impression that prices in Bosnia only follow global market trends when prices are rising.

Serbs also want a new contract with Russia

The price of natural gas may also drop in Republika Srpska. At least that is what local residents hope, while Gas-res remains cautious, stressing that they will be able to announce definitive prices once the contract has been signed.

„We have received no notification from Gazprom Export that current contractual conditions would change, at least as far as prices are concerned. Given that oil prices have stabilised recently, we expect natural gas prices to remain at their current level in the first quarter of 2023,” the company said at the inquiry of Radio Free Europe.

At the same time, Gas-res called the signing of the new contract with Gazprom a mere formality, even though they have not yet received a new draft agreement from the Russian side.

Contracts with the Russian company will expire on 1 January for both entities.