Montenegro has introduced maximum retail prices for heating pellets, with ceilings of €250 per tonne for A2 pellets and €270 per tonne for A1 pellets, including VAT. The measure extends government intervention in the energy market ahead of the winter heating season and is intended to protect households from price increases while supporting stable domestic pellet supply.
Pellets are widely used for heating in Montenegro, particularly in the northern and central parts of the country, where consumption increases substantially during colder periods. For households, the regulated prices provide greater certainty over heating costs during the period covered by the measure. For pellet producers, however, the ceilings restrict the extent to which higher timber, energy, labour and transport costs can be reflected in retail prices.
The difference between the two regulated prices is €20 per tonne, reflecting differences between A1 and A2 pellet quality and production costs. The intervention also creates a supply consideration. If prices on export markets rise significantly above the regulated domestic ceilings, producers could have an incentive to direct production abroad, unless domestic supply conditions or export restrictions prevent this.
Maintaining adequate domestic availability will therefore be necessary for the price limits to achieve their intended effect. The first significant pressure on the system is expected during periods of peak winter demand. The pellet measure follows repeated government reductions in fuel excise duties, forming part of wider fiscal and regulatory interventions aimed at moderating household energy costs.
Although the pellet market is smaller than other energy markets, heating costs can account for a substantial portion of household expenditure during winter, making the sector particularly sensitive to price changes. The government therefore faces the task of balancing household affordability, producer viability and security of supply under the price limits through June 2027.
