As the Croatian Energy Regulatory Agency (HERA) gets ready to announce the new public service gas price effective from October 1, concerns are mounting over the potential price hike. Key questions include how much the price will increase, whether the government will provide subsidies, and if gas suppliers offering market-based services will be more affordable than public services.
HERA’s pricing formulas are intricate, leading to widespread speculation about the upcoming gas prices. Dalibor Pudic, President of the Croatian Gas Association, predicts that gas bills for the upcoming winter months could be 25-30% higher compared to the previous period. However, the increase may not be as sharp when compared to the gas bills citizens paid in October, November, and December of 2023 at the start of the last heating season. Realistically, households can expect a 15-20% increase in their gas bills this year, mainly due to a 5% drop in gas prices in Croatia in April.
Since around 85% of annual gas consumption occurs between November and March, the most accurate comparison should be between winter seasons. For instance, if a household spent €500 on gas last winter, they should anticipate a 15-20% increase in costs this year, Pudic explained. He also noted that the price increase could be smaller if the government continues to subsidize gas prices.
However, Pudic argues that energy subsidies should be reduced, as they do not encourage more efficient energy use or consumption rationalization. The government had announced plans to revise and scale back the measures introduced at the start of the energy crisis and inflation surge, but details have not yet been provided. This revision is expected to impact not only households but also some businesses. The Croatian Employers’ Association (HUP) has urged the government to consider protecting the most vulnerable groups, including micro and small enterprises, when making final decisions.
