February the 14th, 2022 - The crisis surrounding rising energy prices across not only Croatia but the rest of Europe and indeed the world is continuing to throw proverbial spanners in the works for many and causing growing concern for companies and business. Croatian Government inflation measures are set to be rapidly introduced as a result of the spiralling situation which poses very little good for the domestic economy.

As Poslovni Dnevnik writes, at some point in the middle of next week, new Croatian Government inflation measures aimed at maintaining the standards of the country's residents due to high inflation, will be introduced. The move will now be being anticipated by many as the situation continues to unfold in a negative light.

RTL Television published the first hints about what these Croatian Government inflation measures might look like when they come into force:

Most of the measures are aimed at the most vulnerable people among us, therefore it has been announced that special vouchers to cover the difference in rising bill amounts will amount to more than 200 kuna at a time, and that they could also be extended to a larger circle of users during this inflation crisis.

The Prime Minister's Advisor for Economic Affairs, Zvonimir Savic, confirmed that there will be a reduction in the VAT rate, a topic which has been being talked about in many sectors for a very long time now. VAT on energy will be reduced, and state-owned suppliers will have to give up part of their earnings as a result of that.

However, it has not yet been decided whether these new Croatian Government inflation measures will reduce the VAT on gas down to 13 or a very welcome 5 percent.

On top of that, we do know that the tax placed on basic food products - eggs, flour, sugar, milk and the like - will be reduced from 13 to 5 percent.

For more, check out our dedicated politics section.

February the 6th, 2022 - Just how does the Croatian Government plan to shield the average resident of this country from the ever-increasing prices for gas and electricity? There does appear to be somewhat of a plan in place.

As Poslovni Dnevnik writes, due to the current wave of exponentially rising prices, especially for energy, some EU member states have already adopted a package of measures to mitigate the price shock for residents. There is a lot of talk here in Croatia about inflation and prices, but the Croatian Government hasn't yet revealed the details of the aforementioned package of similar shielding measures.

However, it seems that it will be adopted earlier than it has been communicated so far, more specifically at some point during this month. At the same time, a solution to the gas crisis hasn't yet been found in Zagreb. Company owners are scratching their heads and don't know what to do with the huge bills they're getting, gas companies don't know what to do with their losses, and the city and the state are continually communicating in opposition as to who will pay the minuses and to what extent.

Prices in many shops have already risen several times and will continue to grow as this situation unfolds, but what's worrying many is the reports of a ''tsunami of price hikes'' which is set to arrive in April, when gas and electricity prices will rise even more. Everyone is waiting for the Croatian Government's package of measures with which, according to employers and the opposition, the powers that be are already running very late, as reported by N1.

"As for the thesis that it's late, no it isn't too late. There's nothing to be late for. We're working on a package of measures. This package of measures will affect all stakeholders in the system, in part companies. The idea is not to wait too long with this package, for it to be presented to the public and those interested during the month of February, in the coming weeks,'' said the Minister of Economy and Sustainable Development, Tomislav Coric.

Gas vouchers?

The poorest residents of this country who have already received electricity vouchers can now count on getting their hands on gas vouchers as well. It isn't yet known how many of them will have this particular possibility expanded to them and how many vouchers will be issued. As prices for both electricity and gas are sure to rise dramatically, the conclusion is clear:

"Two hundred kuna cannot be enough, but it's difficult to say at this moment in time how much the amount will have to go up. We ourselves tried to calculate whether it needs to be 300, 350, 400 or some other amount,'' said Kresimir Sever from the Independent Croatian Trade Unions.

A gas crisis in Zagreb

Meanwhile, a real gas crisis is happening here in the capital. When it comes to the city's gasworks, the supply is in such losses that bankruptcy is now a real threat, and the help of the state should not be counted on either.

"One should not expect from the Croatian Government, where the city government is in Zagreb, to cover the debt of the city gas supply in Zagreb," said Minister Coric.

However, Zagreb Mayor Tomislav Tomasevic claims that talks between the City and the Croatian Government are taking place. He admitted that part of the responsibility lies with the former administration headed by the late Milan Bandic, but there is also an objective circumstance - gas prices that are raging absolutely everywhere.

"There are also talks in various European Union countries between suppliers owned by local governments and the state, to absorb these blows, especially in the business sector, and also to enable the normal operation of these companies because there are many alternatives, all of which are bad for everyone,'' Tomasevic pointed out.

For more, check out our politics section.

February the 2nd, 2022 - The increase in fuel and gas prices has been a topic on the lips of many across Croatia for several weeks now. With the government having stepped in previously to cap the rapidly rising prices of fuel in order to keep drivers happy, now the situation with gas is becoming an enormous issue. Zagreb's Dubrava hospital (KB Dubrava), which has become synonymous with coronavirus after having been declared the ''covid hospital'' back in 2020, recently received a gas bill totalling an eye-watering 3.8 million kuna.

As Poslovni Dnevnik writes, after companies headquartered here in the capital were shocked by their own gas bill totals, the shock then made its way to the City of Zagreb's state-owned hospitals. The gas bill for the last two winter months is higher than the bill for the whole of 2020. A solution to this unsustainable issue is, worryingly, not yet in sight.

Heating and air conditioning for 68 thousand square metres, steam sterilisation, cooking and so on is bound to add up, especially given the fact that the boiler room of the Dubrava hospital is the largest hospital boiler room in all of the Republic of Croatia. This hospital's gas bill for December quite rightly sent them into a state of shock and disbelief.

"Last year we paid 800,000 kuna for the gas bill covering the same amount of space, and this year we paid 3,800,000 kuna for a slightly lower consumption per cubic metre,'' Elkaz Cehajic, head of the technical affairs department at the Dubrava hospital, told HRT.

That is 73 percent of the bills they paid for the whole of pandemic-dominated 2020. Another Zagreb hospital, KB Merkur, has had to face the same problem. Back in December 2020, they paid a 178 thousand kuna bill for gas, just one year later, that same gas bill stands at 740 thousand kuna.

At the Sveti Duh hospital, they are currently resisting high energy bills because they are heating the premises through the heating plant. Gas is used for cooking and burners in the laboratory, and there was no increase.

“Our owner and founder, ie the City of Zagreb, agreed on our behalf for a fixed price for gas, ie a price per unit volume. We're actually protected by that contract, as are a number of other companies owned by the City of Zagreb,'' said Ana-Maria Simundic, the director of KB Sveti Duh.

For more, check out our lifestyle section.

ZAGREB, 26 Jan 2022 - Prime Minister Andrej Plenković announced on Wednesday that the government would act in three segments in an effort to alleviate the energy price hike - social transfers, allowances for gas and electricity, and elements related to the taxation system, VAT.

"The government is carefully analysing trends in energy prices and the measures other European Union member states are taking. Currently, we are considering all the options that will protect the standard of citizens," Plenković said at a conference "Energy Security in an Era of Fast Decarbonisation," organised by the Jutranji List daily.

Recalling that last autumn, the government capped the price of oil products, when it was necessary, Plenković reiterated that the situation is being monitored with regard to the growing prices of electricity and gas.

He said that the government's activities would be conducted in three segments with the basic aim of relieving the impact on households and citizens.

The first segment is a measure of social transfers with the Prime Minister announcing increased allowances for socially vulnerable citizens. Today that is a maximum allowance of HRK 200 and 64,000 socially vulnerable households will receive vouchers.

"Our plan is to adopt a new regulatory framework to increase the scope of those allowances and expand their implementation to gas besides electricity. We will expand the circle of beneficiaries entitled to those allowances. We will act through all three elements to protect the most vulnerable in society," said Plenković.

The second part of the package refers to reviewing all elements in the final calculation of the price of gas and electricity. Here we will lean on the important role HEP has as the national energy company which in these circumstances, has the strength to take on some of the burdens, he underscored.

The third element is to review all the elements we have through the taxation system and VAT with the Prime Minister recalled that currently, VAT on electricity is 13% and 25% for gas. "We are preparing a substantial fiscal analysis of impact, we are considering a reduction to buffer the impact on citizens and the economy," said Plenković.

In his address, he recalled the reasons for the significant energy price hike adding that Croatian citizens did not experience any significant growth in the past period. In the EU the price of energy increased by an average of 30%.

In the context of the global energy crisis, speculation is increasing about the problem of energy supplies while Plenković said that Croatia still has significant domestic production of hydrocarbons and satisfies 20% of its consumption whereas with gas it satisfied 30% of domestic consumption last year.

He underscored the LNG Terminal on Krk island saying that Croatia has secured gas supplies from all parts of the world.

"We recognised the strategic significance of this project for Croatia's energy independence and to diversify supplies," he said, adding that the terminal gives Croatia a different dimension on Europe's energy map.

Last year 21 ships with LNG arrived at the terminal and unloaded about 3 million cubic metres which provided 1.7 billion cubic metres of gas that was handed over to Croatia's transport system. This year 24 ships are planned.

Croatia has to be ambitious in energy transition

Plenković believes that Croatia has to be ambitious with regard to energy transition and he announced public consultation regarding Croatia's hydrogen strategy to 2050. He recalled planned investments in solar power plants, new technology, geothermal water, nuclear energy and the Krško nuclear power plant.

He recalled that 37% of the funds from the Recovery and Resilience mechanism is earmarked for green transition and funds will be available from other sources too.

He added that a new EU legislative package foresees the establishment of a social fund for climate policies that would ensure additional funds to relieve the impact of reducing greenhouse emissions. Croatia would have €1.4 billion available which will help citizens finance investments in energy efficiency, new heating and cooling systems and cleaner mobility.

For more, check out our dedicated politics section.