Rising prices of oil, natural gas, and electricity increasingly burden the household budgets of BiH citizens. While global disruptions in the energy market affect energy prices, BiH’s dependence on oil and gas imports, along with a lack of alternative supply routes, adds to the problem. Meho Kulovac, an energy consultant, speaking as a guest on Nova BH’s Dnevnik, warned that new price increases could follow starting January 1, and much will depend on how cold the winter turns out to be.
In a conversation with journalist Armina Čengić, he discussed the causes of price increases, how global trends affect the domestic market, and opportunities for citizens to reduce their energy costs.
Crisis in the Middle East Increases Energy Prices
Kulovac emphasized that global price increases of energy are primarily connected to the crisis in the Middle East and the closure of the Strait of Hormuz, one of the key routes for global transport of oil and liquefied petroleum gas.
“Over the past year, the price of all energy sources, especially oil and gas, has risen worldwide, mainly because of the events and crisis in the Middle East and the closure of the Strait of Hormuz,” Kulovac said.
He emphasized that BiH is especially sensitive to such disruptions because it does not have its own oil and natural gas sources, as well as a refinery. This is why the country depends on imports and prices on the international market.
“Bosnia and Herzegovina does not have sources of either natural gas or oil. Furthermore, we don’t have our refinery, and we have only one supply route for natural gas coming into Bosnia and Herzegovina. Therefore, we depend on prices in the European and global markets,” he explained.
Why Doesn’t Fuel Get Cheaper When Oil Prices Fall?
One of the questions was why a drop in oil prices in the global market is not reflected in fuel prices in BiH.
Kulovac explained that there is a time lag between the purchase of oil and its delivery to the domestic market.
“Oil is purchased in the market today, and it arrives in Bosnia and Herzegovina a month or two after the purchase. Therefore, what happened to oil prices today will reflect on Bosnia and Herzegovina after a certain period,” he stated.
Speaking about the price increase, he compared the situation from 2021 with the situation today.
According to him, the price of a liter of fuel in 2021 ranged between 1.80 and 2 BAM, whereas today’s figures of 3.60 and 3.80 are being discussed.
He illustrated how much of a burden this is for citizens using the example of an average household with one car that travels about 10,000 kilometers annually.
“In 2021, that mileage consumed fuel worth between 1,200 and 1,300 BAM. This year, we are talking about a figure of 2,400 to 2,500 BAM,” Kulovac noted.
Fourth Gas Price Hike: Citizens Can Hardly Avoid Higher Bills
A special topic of discussion was the 12 percent increase in the wholesale price of natural gas in the Federation of BiH, approved by the FBiH Government on October 1. As stated during the conversation, this is a fourth price increase this year.
Kulovac emphasized that due to its reliance on a single supply route, BiH does not have enough room to negotiate more favorable terms.
“Bosnia and Herzegovina, considering it has one natural gas supply route, from the eastern side through TurkStream, has absolutely no possibility for special negotiations or defining better prices,” he said.
As long-term solutions, he singled out the diversification of supply sources and reduction of energy consumption.
“We cannot influence the price of that gas as such, but we can work on reducing the need for it, meaning reducing the energy consumption, to lower the bills,” he said.
When asked whether a retroactive gas price increase is justified, Kulovac did not give a definitive assessment, but pointed to the costs borne by distributors.
“I cannot say at this moment whether it is justified or not, but they pay that exact same cost to their suppliers, meaning those who deliver our gas to us,” he stated.
He also recalled gas price trends in previous years. After a significant increase in 2022 linked to events in Ukraine, prices dropped somewhat in 2023, while 2024 and 2025 were relatively stable. However, this year has been marked by multiple price hikes.
Higher Electricity Consumption Means Higher Bills
Although Bosnia and Herzegovina has its own electricity generation capacities, including hydroelectric power plants, households using electricity have not been spared rising costs.
During the interview, it was stated that the average price of electricity for households in the Federation of Bosnia and Herzegovina in the first six months of this year increased by 6.5 percent, according to the Agency for Statistics BiH.
Kulovac recalled that electricity consumption blocks, namely the green, blue, and red blocks, have been introduced in the Federation of BiH, calculating prices based on the amount of energy consumed.
“In this way, an attempt is made to protect those who consume the least electricity, ensuring they get the lowest price. And the higher the electricity consumption, the higher the price per kilowatt-hour for those who consume more,” he explained.
He believes that long-term bill reduction requires investing in household energy efficiency.
“There is no talking about energy efficiency and energy reduction if our building lacks thermal insulation or has poor joinery. Therefore, that is the baseline measure,” he emphasized.
Following building insulation, he recommends installing more efficient heating systems, such as heat pumps, and utilizing solar power plants.
According to him, households can produce a significant portion of the electricity they consume on their own this way.
New Price Increases Possible from January, Winter Will Be Decisive
At the end of the interview, Kulovac warned that citizens could face a new rise in energy prices as early as the beginning of next year.
“Unfortunately, the current situation is such that we can expect some price increases starting January 1, especially when talking about gas and other energy sources that are analyzed quarterly,” he said.
However, he emphasized that much will depend on weather conditions during the winter.
“If the winter is colder, there will be a greater need for heating sources and energy—not just natural gas. Pellets and firewood, as we have seen in past years, can significantly increase in price in December, January, February, and March if winters are cold,” Kulovac warned.
He recommended that citizens secure their heating energy on time and also think long-term about reducing their households’ energy dependence.
As key measures, he highlighted thermal insulation of buildings, the use of renewable energy sources for heating, and the installation of solar power plants through the customer-producer model, N1 writes.
