Todays Date
September 29, 2020

Price rises have loaded another 4,000 denars per year

The rise in electricity prices for 3.4 percent, fuel for two denars and duty on cigarettes will further burden the family budget by more than 300 denars per month. This price rise will significantly make other costs more expensive and unravel the inflation spiral

Sasho Petrov, textile worker from Stip reluctantly accepts new decisions on fuel, electricity and cigarettes price increase. This will additionally “burden” the thin family, “textile-retirement” budget.

“My wife and I work in textile industry and get 10,000 denars salary. My mother has 6,000 pension, and we cannot make ends meet. We have 26,000 denars per month, bills to pay, to feed. All day I am with a pen in my hand and do not know where to find additional money to cover these costs”, says Petrov.

Here is his math:

Electricity price rise 3,4% (2,500 denars monthly bill) …………….        90 denars

Fuel price rise 2 denars per liter (50 liters per month) ………..      100 denars

Cigarettes increase 4 denars per packet (40 packets per month) ……       160 denars

Monthly price rise      …………………………………………………………..      350 denars

ANNUAL PRICE RISE       …………………………………………………….  4.200 denars

 

Petrov’s fate is shared with around 400,000 families in Macedonia. They do not know how to cope with all the price rises.

Katerina R., shopkeeper in eastern Macedonia, says that citizens react it is too expensive, and she does not know how they will accept the latest price rises.

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“Bestsellers in my store are Macedonian cigarette brands whose price is 50 to 60 denars. The price of these cigarettes will increase for four denars, which is not little. We have not increased the prices of cigarettes yet, we have a stock of old and therefore no reaction from consumers. I expect people to react because the price rise is almost 10% and it will mostly hit the poor”, says Katerina.

Price rise for economists means impoverishment of citizens and enriching wealthy corporations, says Gligor Ivanovski, owner of accounting and consulting bureau.

 

Inflation spiral going up

Experts in the country expect the latest price rise to pull inflation spiral up.

For Ivanovski, corrections will certainly be on the prices of other products, thus pulling the inflation spiral up.

“The fact itself that oil derivatives and electricity are the main inputs in almost all products, raising prices of these products will put strong pressure on price increase for all other products”, says Ivanovski.

ginova slika od intervju

He adds that some companies will initially be reluctant to price increase in some products, but in the long run they will certainly raise prices.

Ivanovski’s assessments are also confirmed by Nikola Malinov, owner of the bakery “Stipski sokak”. He says that they sell bread at 25 denars, but some larger bakeries immediately reacted by increasing the price by 2 denars.

“Energy has a high share in the costs of production and distribution of bread. The rise in electricity and oil price directly harms us. In the beginning we will not increase prices, but this will certainly push the price increase in the future”, adds Malinov.

Uncertainty hovers over Dragan Jovanovski, taxi driver from Skopje.

“For now we will not increase taxi service fees, but if prices continue to rage like this, we will certainly require adjustments as fuel is the highest item in the taxi service,” complains Jovanovski.

Regulatory Commission’s costs have remained unclear

regulatorna-mk

 

The way rise in fuel price was explained has caused further resentment. Experts suspect that the rise is justified.

For Ivanovski, Regulatory Commission’s barren explanation of the rise in electricity price creates confusion and doubt among citizens.

“It would have been fair to tell the citizens what the costs were. Are these costs affected by the excessive increase in employment in state enterprises during the elections? Is not there irrational spending in their work? With this explanation of the Energy Regulatory Commission, we are sentenced to accept only their position, without having insight what the costs are, how much they are increased, if they are real. Economically, this 3.4% rise in electricity price has not been completely clarified to the captive consumers”, said Ivanovski.

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He adds that for oil derivatives the price depends on the movements of crude oil on world markets and the movement of the dollar-euro ratios, where we as a country cannot influence. But we can influence the price of electricity.

From the Energy Regulatory Commission we have not received a response despite the several attempts to contact the persons in charge.

The opposition SDSM came up with doubt about the justification of the rising cost of electricity. This party believes that reduced production of electricity and poor repairs are the real reason for the increase in electricity imports, which enter the country at higher prices.

Editor: Stojanka Mitreska