Serbia has agreed to extend a gas supply arrangement with Russia by three months, President Aleksandar Vucic said on Tuesday, as it battles to secure a long-term deal.
Serbia is heavily dependent on Russian gas but it has failed to secure a long-term contract since a three-year deal expired this summer, relying instead on rolling extensions - with Vucic previously expressing frustration with the situation.
"We have agreed to extend gas supplies for another three months, until March 31, so people can feel safe and sleep peacefully," Vucic said, adding that Serbia would have enough electricity and gas for the coming winter.
He previously said that if no agreement was reached by the end of the year, Serbia would begin talks on alternative supply sources.
According to Serbia's gas company, Russia supplies about 6 million cubic metres per day at roughly 290 euros (around $342) per 1,000 cubic metres, compared with a market price closer to 360 euros ($424).
Serbia also imports gas from Azerbaijan and produces domestically, but not enough to make up for a loss of Russian supply.
Along with natural gas, Serbia is also grappling with US sanctions on the oil company Petroleum Industry of Serbia (NIS), due to its majority Russian ownership.
The company operates the country's only oil refinery and has not received a single drop of crude since the sanctions took effect on October 9, prompting the shutdown of the facility in late November.
Talks have been under way on the sale of the Russian stake, which amounts to 56 percent, in order to meet the conditions for lifting the sanctions.
Serbia, which says it is suffering heavy losses as a result of the sanctions, has set a mid-January deadline for the sale.
After that, it has said it will appoint its own management at the company and offer a buyout.
President Aleksandar Vucic has previously described Russia’s decision to stick to short-term gas arrangements rather than a new multi-year deal as an attempt to prevent Serbia from nationalising NIS.
