Montenegro has capped retail pellet prices through June 30, 2027, extending government intervention in energy markets ahead of the winter heating season.
The government set maximum prices of €250 per tonne for A2 pellets and €270 for A1, including VAT.
The measure is intended to shield households from winter price spikes and stabilise domestic supply.
Pellets are widely used for heating, particularly in northern and central Montenegro, where demand rises sharply during colder months.
For consumers, the cap provides immediate price certainty.
For producers, it limits the ability to pass through increases in timber, energy, labour and transport costs.
That creates the main market risk.
If export prices rise materially above the regulated domestic ceiling, producers may have an incentive to redirect output abroad unless supply conditions or export rules prevent it.
A price cap can therefore protect consumers only if domestic availability remains adequate.
The decision follows repeated government reductions in fuel excise duties, showing a broader willingness to use fiscal and regulatory measures to moderate household energy costs.
The pellet market is smaller but politically sensitive because heating expenditure can represent a large share of winter household budgets.
The government must now balance three objectives: affordability, producer viability and security of supply.
The €20-per-tonne difference between A1 and A2 recognises differences in product quality and production costs.
The first test will come during peak winter demand.
If supply remains stable, the measure may contain household costs without materially disrupting production.
If shortages emerge, the intervention will have shifted the problem from price to availability.
