ZAGREB, 10 Jan 2022 - Gas suppliers in Croatia are on their knees and due to an enormous increase in prices of that energy product on European stock markets, many of them are facing ruin, with the collapse of the entire system being the worst-case scenario.

This conclusion is based on a dramatic notification sent in mid-December to the HERA energy market regulator and the Ministry of Economy and Sustainable Development by the Croatian Chamber of Commerce (HGK) association of gas suppliers and distributors, the Jutarnji List daily reported on Monday

Even though the impending increase in gas prices, expected on 1 April, has been announced for a long time, the dimensions of the problem were not presented as clearly as in this notification.

According to the association of gas suppliers and distributors, the regulated price of natural gas for the period from 1 April 2022 to 31 March 2023 will be around €43.91 per megawatt hour, which is as much as 133% more than in the current gas year (lasting until 1 April). When all other costs that make up the final consumer price are added to this, it would eventually result in 59-86% higher gas bills for residential consumers, depending on which part of the country they are located in.

This is a huge increase but the suppliers' problem lies in the fact that not even such an increase can guarantee them viable operation. Moreover, since the market purchase price of gas in the same period is estimated at around €79.41 per megawatt hour, suppliers would lose around €35.5 per megawatt hour of gas that they sell, with the loss in the segment of household supply alone amounting to one billion kuna.

It is quite clear that suppliers - very often municipal companies owned by local government units - cannot survive such losses and that their collapse would threaten gas supply security, says the daily.

For more, check out our dedicated politics section.

ZAGREB, 21 Oct 2021 - Electricity and gas prices for Croatian households and "a huge share" of businesses will not increase until the end of the heating season early in April, Prime Minister Andrej Plenković said on Thursday.

The only ones that could feel the increase are businesses that did not have long- but short-term gas supply contracts, he added.

He was speaking to the press in Brussels as he arrived at an EU summit that will discuss the surge in fuel prices, among other things.

Plenković said the government had various tools at its disposal that it would use depending on developments with energy prices.

For now, the government has limited the maximum prices of petrol and diesel. "Thereby we stabilized expectations over the next month to see how the situation with oil prices will develop and in that way cushion any blow to households."

He said that after the government's abundant help to businesses during the pandemic and now that conditions had been created for the economy to rebound strongly, he did not wish living standards to be in jeopardy.

Rule of law

The EU summit will also address the rule of law after the Polish Constitutional Court found that in some elements national law is above European law, which was roundly criticized in the EU.

Plenković said it was necessary to first hear out Polish Prime Minister Mazeusz Morawiecki, who sent a memo to all member states' leaders, explaining what the court really decided.

"It's important that the EU does not divide because in times of crisis it's good for it to be as homogeneous as possible. But, on the other hand, when we were entering the EU, we too had to change our constitution quite a lot in order to align with the European legal order. Therefore our position is that we should honor all that we agreed to when we entered the EU."

The summit will also address the COVID situation, foreign relations, migration, trade, and the digital society.

Plenković said the situation in Croatia's neighborhood would be discussed tonight as a continuation of the EU-Western Balkans summit held earlier this month.

For more about politics in Croatia, follow TCN's dedicated page.