Croatia, EC is preparing a negative opinion on the Government’s decision to ban exports of domestically produced natural gas

, SEE Energy News

The European Commission (EC) is preparing a negative opinion on the Croatian Government’s decision to ban exports of domestically produced natural gas, which should be sold only to state- owned power utility HEP at lower, regulated price. This move will enable cheaper gas supply for many consumers, but it will also distort competition.

A possible negative opinion of the Commission would be based on the principle that the privileged position of one buyer represents a violation of the rules of free market competition, which is the foundation of the EU single market. According to unofficial information, Croatian Government will not be able to help its consumers the way it intended, without facing consequences.

Unofficially, the EC currently considering how this decision would affect the neighboring EU member states. The EU has a very solid legal framework by which it ensures security of supply in the spirit of solidarity among member states. Individual restrictions of one member state that affect the cross-border flow of gas are unjustified and unwanted and can only increase the problems in the current situation on the gas market.

Limiting exports can only be justified on the basis of very specific reasons, such as the protection of public order and the protection of health, and they must in every respect comply with the principle of proportionality. Economic reasons are never a justified reason for restricting exports.

The European Commission is in contact with the relevant Ministry and if the agreement is not reached, it will open a procedure for violating the free market rules. The first step would be sending a reasoned opinion, which should be addressed within two months.