Serbia will raise gas prices on Nov. 1 for the first time in three years, a government spokesman said. Srbijagas, the state-owned gas company, will increase gas prices for industrial users 15 percent, while households will pay 10 percent more, Milivoje Mihajlovic said yesterday in an interview after the government decision. The higher prices were approved a week after consumer-price inflation slowed to 9.3 percent, the first single-digit reading since November 2010. Serbia is heavily reliant on gas imports from Russia and Srbijagas has been asking for a 30 percent price increase both for households and industrial consumers to cover the rising costs of gas imports since 2008. The unprofitable company, set up in 2005 after the oil monopoly Naftna Industrija Srbije AD outsourced its gas business, borrowed 210 million euros ($287 million) in July. It had 300 million euros in accumulated losses in March this year. The new gas prices are expected to directly add 0.1 percent to inflation, Ivan Nikolic, an analyst with the Belgrade-based Economics Institute. “The impact of the gas price increase may be underestimated, especially for some parts of the country where reliance on gas for heating is greater,” Nikolic said. The overall impact on inflation from a twin increase in gas and heating prices would be as much as 0.3 percent, Nikolic said. To contact the reporter on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net Misha Savic in Belgrade at Msavic2@bloomberg.net To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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