Serbian Minister of Mining and Energy Petar Skundric on March 18 assessed that the Electric Power Industry of Serbia will remain in majority state ownership.

"The Electric Power Industry of Serbia will never be privatized according to the general model for selling enterprises," Skundric said in Novi Sad, at the opening of an electrical relay station into which EUR1.7 million was invested.

He announced that EUR9 billion will be invested in the revitalization and construction of new electricity production capacities in Serbia.

"This company is a national treasure, a national asset and a great need of society, so it will remain majority state-owned. Precisely for this reason, the company should remain in the majority ownership of Serbia, that is, its citizens," Skundric said.

He added that the EUR9 billion investment will partly be provided by the company, and partly from favorable credit arrangements.

"We are finalizing the negotiations on a credit for the full reconstruction of the Kostolac Thermal Power Plant, and the construction of a new unit in the plant," Skundric underscored.

He said that the project is worth USD1.07 billion and that the credit is being arranged with China, under extremely favorable conditions, namely, with a repayment period of 15 years and a grace period of five years with an interest rate less than three percent.

The minister also announced the beginning of the construction of new capacities in thermal power plants Kolubara B and Nikola Tesla 3

In other related news, Ministry of Energy and Mining has announced that conditions have been met for the gasoline price in Serbia to rise by RSD4.11 (around EUR0,4) per liter on average.

The latest hike would see MB and BMB gasoline cost RSD114.72 (around EUR1,14) per liter, while D-1 diesel would cost RSD 105.47 (around EUR1.05).

The ministry said it took into consideration the movements of the price of crude oil in the world markets and the dinar-dollar ratio, and since the price of oil has increased by 6.94% percent on average since the last price adjustment, they decided that the conditions were met for the price increase.

The ministry has sent a new price rulebook on fuel prices to the Ministries of Finance and Trade to be agreed upon.

According to the current Serbian decree on prices of oil derivatives, the price of fuel in Serbia is adjusted every fifteen days to the price of oil in the world market and the dollar exchange rate.

Minister of Energy and Mining Petar Skundric yesterday commented on the announcement by saying that the price increase "will not be mandatory", and rejected claims that fuel prices in Serbia are the highest in the region.