February the 7th, 2023 - Croatian energy price capping is going to come to an end in less than two months. What awaits us after the government decision to limit these spiralling prices comes to an end?

As Poslovni Dnevnik writes, in less than two months, the government's measures capping Croatian energy prices for electricity for households and companies will come to an end. What will happen from April the 1st onwards, and are we set to experience even more blows to our back pockets and bank accounts?

At the moment, prices on the wholesale market have stabilised - they're between 150 and 170 euros, which is significantly lower than they were one year ago when they occasionally exceeded 400 euros, and on average were around 270 euros per megawatt hour. The government says that the situation is already being analysed in order to decide in time what to do next, more precisely after midnight on March the 31st, as reported by HRT.

At the beginning of February, people and companies became increasingly concerned about what will happen to electricity prices after March the 31st, 2023.

"What we as employers expect is to receive timely information on what happens with the prices of energy products after March the 31st. As I've repeatedly emphasised, an environment of safety and certainty is necessary for all employers,'' said Irena Weber, the director of the Croatian Employers' Association (HUP).

Individuals who have contracts with private suppliers are already receiving notices about the price increases from April the 1st on, and they've been instructed to switch to HEP. The government has yet to decide what will happen to electricity prices as of April the 1st.

"We tasked the competent ministers, primarily the Minister of Economy and the Minister of Finance, to prepare and analyse the situation for after April the 1st," said Andrej Plenkovic when discussing Croatian energy price issues.

Due to the unusually warmer winter we've been experiencing, not to mention more favourable hydrological conditions, electricity prices on the market are currently lower than they were a year ago, but they are still significantly higher than before the crisis caused by the Russia-Ukraine war broke out and stand at around 160 euros per megawatt hour.

"The analyses show some predictions that such prices will remain what they are for least for the next two to three years," said Drazen Jaksic, the director of the Hrvoje Pozar Energy Institute. People currently pay 59 euros per megawatt hour, which means that without the continuation of the Croatian energy price capping measures introduced by the government, electricity should become more expensive.

"I personally believe that these government measures, which are due to expire on March the 31st, will continue in some form, because suppliers would otherwise be forced to raise prices for people," added Jaksic. The current measures enable consumers to get cheaper electricity this winter than in other countries, the Prime Minister reminds.

"These are enormous sums of money, we're not talking about something small, these are large sums that made it possible for us to go through this crisis much more easily than we would have done without them," said the Prime Minister.

The biggest part of that financial burden of all was transferred to HEP, which has the obligation to accept all consumers who want to leave private suppliers, and in the last four months there have been 41,000 such cases. Whatever happens after March the 31st, HEP says that it will adjust its electricity prices to be in line with the further decisions made by the government.

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ZAGREB, 11 May 2022 - Croatian energy regulator HERA Steering Board chair Danijel Žamboki said at a conference of gas professionals on Wednesday that even in the worst-case scenario regarding gas supply, Croatia would be in a much better position that most EU countries.

"That is so because of the diversification of supply routes, the LNG terminal and domestic gas production, which has been growing," Žamboki said at the 37th international conference of gas professionals, taking place in Opatija on 11-13 May and organised by the Croatian Gas Centre and the Croatian Gas Association.

Recalling that the government in March adopted a set of measures to alleviate the impact of rising energy prices, Žamboki said that the basic task of the regulator was to care for energy producers and protect consumers and that it would continue working on that.

The state secretary at the Economy and Sustainable Development Ministry, Ivo Milatić, said that Croatia was among leading countries in terms of the protection of households amid rising gas prices.

Speaking of the LNG terminal on the island of Krk, he said that it gave Croatia a rare kind of security, "with 800 million cubic metres of gas to enter the gas system from production in the coming year and 1.5 billion cubic metres from the LNG terminal."

The ministry will support a further increase in the terminal's capacity to 6.1 billion cubic metres, he said, noting that that could be achieved in three years' time or sooner.

The director of the Okoli underground gas storage facility, Vlado Vlašić, recalled that the storage capacity had been leased for the next five years and that there was currently no interest on the part of the clients to fill the facility, but that he believed the facility would retain its role and ensure supply stability, thanks to the government's involvement.

Vlašić said that work was underway to expand the storage capacity, which would enable the company to provide additional services in the gas business.

LNG Hrvatska director Hrvoje Krhen said that so far 2.4 billion cubic metres of natural gas had been delivered so far via the LNG terminal at Omišalj on Krk, that 28 LNG tankers had docked at the floating terminal and that around 4 million cubic metres of liquefied natural gas had been delivered.

The LNG terminal supplies gas for around 55% of the market and the gasification capacity has been expanded by an additional 300 million cubic metres of natural gas. The capacity has been fully leased until 2027, and the possibility of further expanding it is being considered, Krhen said.

Plinacro gas transport system operator Management Board member Marin Zovko announced plans for expanding the capacity for shipping gas from the terminal, increasing the capacity of the gas pipelines running to Hungary and Slovenia, and considering a project for an Adriatic gas pipeline grid and connecting to neighbouring countries, such as Bosnia and Herzegovina.

Nikola Mišetić of INA said that own gas production met around 30% of gas needs in Croatia. This year INA will invest more than one billion kuna in research and production, he said, adding that the company was also dedicated to green projects.

Before the opening of the conference, several members of the Green Action protested inside the venue where the event was taking place, carrying banners reading "Gas business is crime" and calling for turning to renewables and energy efficiency as well as reducing the need for gas as much as possible.

For more, check out our politics section.

ZAGREB, 1 April (2022) - Bridge MP Zvonimir Troskot said on Friday the government had not used all the available instruments to cushion the impact of rising prices on citizens' living standards and on businesses or secure energy supply routes, calling for lower VAT and fuel excise taxes and for subsidies for enterprises.

Troskot recalled that Bridge MPs and 16 other MPs had submitted a motion to offer additional short and long-term solutions as, he claimed, the government had not used all the instruments at its disposal.

Asked about a government reshuffle, Bridge MP Nikola Grmoja said he did not want to comment on new candidates for ministerial posts "because it is clear that due to numerous scandals a whole set of government officials are under investigation by independent institutions and the only solution is a new election."

This is not a government reshuffle but an attempt to decriminalise the government, however, such an attempt can never succeed with the HDZ's partners because the ones to be appointed will probably also be compromised, said Grmoja.

Social Democrats expect additional measures for business sector

The Social Democrats group in the parliament today said they expected the government to introduce additional measures to consolidate the economy and help households, noting that a new election would be the best solution.

MP Ivana Posavec Krivec called on PM Andrej Plenković to consider appointing in the coming government reshuffle a minister of transition, noting that Croatia urgently needed transition to renewable energy sources and lower VAT for households and enterprises.

MP Domagoj Hajduković believes Agriculture Minister Marija Vučković should be replaced over inactivity in light of the rising prices.

We still do not know the state of commodity stockpiles and what kind of goods they contain, he said, adding the government had replenished the stockpiles only after the war in Ukraine broke out and prices started to soar.

Prices continue to rise despite cuts of VAT on certain products, he said, noting that unfavourable weather conditions, the rise in prices of mineral fertilisers and large areas of uncultivated land bode a very bad year, he said, fearing Croatia would not be self-sufficient.

MP Matko Kuzmanić warned about the high price of blue-dyed diesel used in fishing and called for subsidies for fishermen.

For more, check out our politics section.

ZAGREB, 31 March 2022 - Prime Minister Andrej Plenković opened a cabinet meeting on Thursday by commenting on the government's HRK 4.8 billion (€640m) package of measures aimed at mitigating the impact of increased energy prices on households and businesses, which enters into force on Friday.

The increase in electricity prices was capped at 9.6% and the increase in gas prices for households at a maximum of 20%. The VAT rate on gas deliveries was reduced for a year from 25% to 5%, and VAT was also reduced on food, agricultural costs, cultural and sports activities, and so on, the prime minister said.

"We also took into account those most vulnerable in our society, who are living at risk of poverty. For them social transfers were increased from HRK 200 to 400, which also includes electricity and gas bills. In this way we are taking care of our fellow citizens who need our solidarity at this moment," Plenković said.

He also mentioned a special scheme for farmers and fishermen, and one-off allowances for pensioners.

Politics: For more, check out our politics section.

ZAGREB, 11 March 2022 - The EU proved to be part of the solution in the COVID crisis and will have to react also in the new situation after Russia's invasion of Ukraine, by capping energy prices among other things, including globally to prevent speculation, Croatian Prime Minister Andrej Plenković said on Friday.

"After the Russian invasion, we have three tragedies, the biggest is the one of the Ukrainian people, the second is the big refugee crisis, and the third is the enormous rise in energy prices," he said in Versailles after a two-day informal EU summit.

The EU proved to be very good in dealing with the pandemic crisis by establishing the special Next Generation EU instrument and through common vaccine procurement and distribution as well as job-retention, Plenković said.

"Now it's necessary to help our fellow citizens and the economy again. It's best to cap energy prices, but this must be a global action. It's not good if someone profits from speculative prices, that's immoral."

Energy and food cannot be treated as other commodities, Plenković said. "We have entered a new phase after Russia's attack on Ukraine in which energy and food will be our strategic resources and we should adapt to that."

He said the countries taking in the largest numbers of Ukrainian refugees would need financial aid as a huge refugee wave could be expected.

In just two weeks, over two million people from Ukraine have arrived in the EU, while about a million people came during the 2015 refugee crisis.

For more, check out our politics section.

ZAGREB, 9 March 2022 - The government on Wednesday adopted a set of measures to buffer energy price hikes worth almost HRK 5 billion, including a bill of amendments to the VAT Act, decisions to subsidise gas prices for households and small businesses, and once-only aid to pensioners and the socially vulnerable.

The measures enter into force on 1 April, whereby the government is directly helping households and businesses, Prime Minister Andrej Plenković said.

The measures are aligned with European Commission guidelines which allow for regulating prices in case of need and justifiable circumstances, he added.

VAT cuts

The government sent amendments to the VAT Act to parliament for fast-track adoption, under which VAT would be reduced from 25% and 13% to 5% on children's food, edible oils and fats, butter and margarine, live animals, fresh meat and fish, vegetables, fruit, eggs, seedlings, fertilisers and pesticides, food for animals, and tickets for concerts, sporting and cultural events.

The government also proposed a 13% VAT rate on natural gas and heat deliveries, firewood, and menstrual products, among other things, and a 5% VAT rate on natural gas deliveries from 1 April 2022 to 31 March 2023.

The VAT cuts are estimated at HRK 2.1 billion.

Gas subsidies for households and businesses

To buffer the impact of gas price hikes, the government decided to subsidise the price for households with HRK 0.10/kWh as well as the price for microbusinesses and SMEs, whose average annual consumption is up to 10GWh, with HRK 0.15/kWh.

The cost of the subsidies is HRK 1.2 billion and will be financed by selling greenhouse gas emission units at an auction in Croatia. The government estimates that the revenue from the sale of those units by 2025 will amount to HRK 4.72 billion.

The government also decided to release 22,000 tonnes of diesel on the market to be sold at market prices.

Measures for the socially vulnerable

At the moment 51,000 persons eligible for a minimum allowance and 40,000 persons eligible for disability benefits and members of their households receive HRK 200 a month for their electricity bills. Today the government decided that 5,700 elderly persons eligible for the national allowance will also be entitled to this monthly allowance.

As of 1 April, this HRK 200 allowance will be doubled to cover gas bills. The annual cost of this measure will be HRK 300 million.

The government also adopted a decision on a monthly allowance, ranging from HRK 1,000 to 4,000, for 1,100 providers of social services for 40,000 persons.

Additionally, 2,570 foster families and 6,000 beneficiaries will be entitled to a HRK 400 monthly allowance, which measure will cost HRK 33 million.

The government tasked the Environmental Protection and Energy Efficiency Fund with paying HRK 1.2 billion from the auction sale of emission units into the state budget to be used as direct support to energy end buyers.

Energy allowance for pensioners

The government adopted a decision on a once-only allowance for 721,000 pensioners whose monthly pension is up to HRK 4,000.

Those whose pensions are up to HRK 1,500 will receive a HRK 1,200 allowance, those with pensions between HRK 1,500 and 2,000 will receive HRK 900, those with pensions between HRK 2,000 and 3,000 will receive HRK 600, and those with pensions between HRK 3,000 and 4,000 will receive a HRK 400 allowance. The cost of this measure totals HRK 480 million.

Aid to farmers and fishermen

The set of measures also envisages aid for 88,000 family farms estimated at HRK 200 million and for fishermen in the amount of HRK 75 million. This aid is subject to approval by the European Commission.

(€1 = HRK 7.5)

For more information on this, check out our dedicated politics section.

February the 23rd, 2022 - The Croatian Chamber of Commerce (HGK) is seeking aid for large Croatian companies as well as for micro, small and medium enterprises as the energy crisis continues.

As Poslovni Dnevnik/Marija Brnic writes, the state of emergency for the Croatian Government will likely leave even less room for negotiations on the possible "inclusion" of large Croatian companies in the package of assistance measures which entrepreneurs are seeking through the Croatian Chamber of Commerce (HGK) even after its presentation last week.

There is a little more than a month left until the start of the implementation of the recently revealed government inflation measures worth almost five billion kuna in total, during which the criteria and methods of obtaining aid should be determined, intended - when it comes to entrepreneurs - primarily for micro, small and medium enterprises. Large Croatian companies appear to have been somewhat left out in the cold.

The Croatian Chamber of Commerce believes that the aforementioned package of inflation measures should be expanded and should include large Croatian companies that have a high share when it comes to their number of employees, as well as their exports and revenues. Otherwise, they say, those companies with a large number of employees and industrial plants with high energy consumption will hardly be able to overcome the impact of the price increases that have and will continue to hit them.

The measures as they stand today envisage subsidies for smaller companies in the amount of 15 lipa per kWh for those with a consumption of up to 10 GWh, and it is planned that 600 million kuna will be made available for vouchers from this measure by the end of March next year.

The Croatian Chamber of Commerce has called on its members to take measures to reduce energy costs for all end users and help companies and industries overcome problems caused by rising prices, and many of them have introduced measures for all consumer groups, thus including large and energy-intensive companies.

Examples of quality measures include Belgium, which has banned unilateral changes to contracts whereby energy distributors and suppliers can increase prices on their own in fixed-price contracts, and in nearby Italy, which abolished network charges in the first quarter of 2022. Italy also reached for a 20 percent tax cut on its large consumers for energy purchased and consumed in the first quarter.

"Following these measures, the members of the Croatian Chamber of Commerce proposed the abolition or reduction of tariff items where possible, or to at least keep them at the same level until the market stabilises," said the Croatian Chamber of Commerce, noting that it is crucial for industrial consumers to have stability in their contracts within the gas year, ie contracted fixed prices.

One of the solutions that can help this category is to reduce the amount of income tax liability by up to 50 percent of the value of investments in renewable sources, retroactively According to their proposal, the compensation for the reduction of the tax liability could be used for a period of four financial years.

For more, check out our business section.

ZAGREB, 16 Feb 2022 - The Croatian Chamber of Trades and Crafts (HOK) said on Wednesday that the government's package of measures for cushioning energy price rises would protect more than 200,000 jobs in the craft industry, but they also said the question was how much prices of products and services could be expected to decrease.

Prime Minister Andrej Plenković on Wednesday unveiled an HRK 4.8 billion (€640 million) package of measures aimed at cushioning the impact of rising energy prices, with the measures including a lowered Value Added Tax (VAT) rate on gas supplies and some agricultural products, subsidised gas prices, one-off discounts on energy bills for pension recipients and other measures.

The HOK said the package of measures "is a comprehensive solution that will help the economy and citizens to overcome the crisis".

The Chamber welcomes government efforts to cushion the impact of several times higher energy prices. The unveiled package, they stress, includes HOK's proposals for measures for micro businesses, SMEs and craftspeople. This primarily refers to coupons for gas for which they will be able to obtain via an application to the Croatian Agency for SMEs, Innovation and Investments (Hamag-Bicro), they say.

Farmers will receive subsidies for purchasing artificial fertilisers, they said, and fishermen will receive HRK 50 million in subsidies for cushioning the increase in the price of blue diesel.

"The package of measures for cushioning the energy price rises will protect over 200,000 jobs in the craft industry," HOK underscored.

Noting that the package of measures enters into force on 1 April, HOK said that the question remained to what extent it can be expected that prices of products and services would fall since a large number of tradespeople were already suffering losses due to exponentially higher bills.

For more, check out our politics and business section.

ZAGREB, 16 Feb 2022 - The Croatian government on Wednesday launched an HRK 4.8 billion (€640 million) package of measures aimed at shielding consumers from rising energy prices.

The package includes the capping of the growth of electricity prices to 9.6% and the growth in prices of gas to 20%.

Furthermore, the Value Added Tax (VAT) rate on gas supplies and some agricultural products will be lowered.

The package also provides a rebate on domestic energy bills.

Unveiling the set of measures, Prime Minister Andrej Plenković said today that the package had been prepared in a systematic manner, and is "timely and all-encompassing".

The package contains the measures targeting households, businesses and agricultural producers, Plenković said adding that the state-run Croatian power provider HEP will also bear a part of the burden to address the rising electricity prices.

The measures encompass tax reduction, subsidies for citizens at risk of energy poverty, and one-off discounts on energy bills for pension recipients, while businesses, farms and fisheries will be entitled to subsidies to cope with the rising energy costs.

Cap for electricity paid to make HRK 460 million disposable to households

The caps on the rise in prices of electricity will make HRK 460 million disposable to households.

The subsidies for households using gas will include HRK 0.10 per kilowatt-hour.

The support will be provided to micro businesses and SMEs with the average annual consumption of gas up to 10 gigawatt-hour, and the discount will be HRK 0.15 per kWh.

The VAT rate on gas and heating energy will be lowered from 25% to 13%, the same VAT already applied on power. The lower VAT is a permanent measure.

VAT will additionally be reduced to 5% on gas as a temporary measure, in place from 1 April 2022 to 31 March 2023.

VAT to be reduced on some food in bid to tackle rising cost of living for households

The VAT rates of 13% will be reduced to 5% for fresh meat, fish, eggs, fruits, vegetables, cooking oils, and baby food and the the standard 25% VAT rate will be slashed to 5% on some items in the agricultural production (fertilisers, plants etc.).

The package aimed at tackling rising costs of living also includes the reduction of the 25% VAT to 13% on feminine hygiene products, such as tampons and sanitary towels.

The coupons for electricity bills for senior citizens at risk of poverty will increase from 200 to 400 kuna a month and will now also be applicable to gas bills.

Pensioners whose monthly income is up to HRK 4,000 will be also entitled to payments between HRK 400 and 1,200 under the the energy support scheme. 

(€1 = HRK 7.523717)

For more, check out our politics and lifestyle section.

ZAGREB, 15 Feb 2022 - Prime Minister and HDZ party leader Andrej Plenković said on Tuesday that the government's set of measures designed to cushion the impact of rising energy prices was comprehensive and would be good both for households and the business sector, and that they would be presented at 10 am on Wednesday.

"The measures... will alleviate, as much as possible, the impact of price growth expected as of 1 April," Plenković told reporters after a session of the HDZ Presidency and National Council but he would not reveal any details.

He would not say if it was true, as reported by some media outlets, that VAT on gas would be lowered while VAT on electricity would not.

Asked if Economy Minister Tomislav Ćorić still enjoyed his trust following accusations by Ćorić's former assistant, a suspect in an investigation by the USKOK anti-corruption agency, Plenković said that Ćorić had already given a statement on that topic.

"The fragments of investigations that are being leaked are so small that they do not deserve any comment. Especially not mine," Plenković said, adding that the investigation was under way and that he did not want to comment on statements given in investigations.

Ćorić said earlier today that in 2019, as minister of environmental protection and energy, he had in no way favoured investors in the Krš-Pađene wind park who are under investigation by the USKOK anti-corruption office, of which he has been accused by his former assistant Domagoj Validžić.

Plenković said that he had never been contacted with regard to that topic, and that the questions one should ask are which term of government this incident occured under, and how the company in question arrived in Croatia.

"I hope the State Attorney General's Office is interested in that as well," he said. 

Asked about the renovation of the basement where his chief-of-staff Zvonimir Frka-Petešić keeps his books, Plenković said that the Državne Nekretnine state property management company would explain everything.

"That has nothing to do with him. This... shameful, orchestrated lynching campaign that has been going on against Frka-Petešić for a month is one of the more stupid, irritating and mean things in the media and internet sphere," said Plenković.

With regard to the Constitutional Court's decision to reject a motion by 35 opposition MPs and 28 other applicants who claimed that the introduction of the COVID-19 certificate mandate in the public sector had been neither constitutional nor lawful, Plenković recalled that Croatia probably had had the least strict COVID-19 rules.

"And yet you have petty politicians who even want to organise a referendum, even though we have enabled social activities, work, transport and education, a great tourist season, saved jobs, paid wages to 700,000 people in the private sector, saved 120,000 businesses, while GDP is expected to grow by more than 10% this year," Plenković said, noting that there was nothing surprising about the Constitutional Court's decision.

Answering a reporter's question, Plenković said that at today's meeting of the ruling coalition, the leader of the People's Party - Reformists, Radimir Čačić, had apologised for his statement about Defence Minister Mario Banožić.

"I told him that a partner should act like a partner. You act like the Opposition if you are the Opposition," said the PM.

Speaking in an interview with N1, Čačić said that as far as he was concerned, Banožić could leave tomorrow. "He causes harm to himself with the way he communicates, not to mention others. As far as I'm concerned, Banožić can leave tomorrow," the junior partner in the ruling coalition said.

Plenković said that Banožić was in charge of a HRK 7.2 billion budget and that he signed contracts for the procurement of the Rafale fighter jets and the Bradley fighting vehicles.

"Not many ministers have something like that in their careers. Only I decide about (whether a minister leaves), nobody else," he said.

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