Croatia’s government to liberalize gas prices after next heating season

The government will regulate the gas price for the next heating season and will then leave it to market forces, energy ministry state secretary Ante Cikotic said on Thursday while commenting amendments to the gas market law, which are currently in parliamentary procedures. Cikotic explained that the government has to ensure security of supplies and stressed that the desire to use more local sources is one of the reasons why the government wants to buy MOL's share in oil and gas company INA. In this context, Cikotic also mentioned the importance of the construction of the future LNG terminal with 2 BCM capacity (completion of documentation for a building permit expected in 1-2 months, to be operational in 2019) as a new route for supplies in efforts to keep gas transportation prices low. He also said that the government is in talks with energy market regulator HERA and state-owned gas transmission system operator Plinacro about keeping transport prices low.

The statement follows media speculation that gas prices are due to increase as of April due to partial liberalization of the market allowing INA to sell gas to those parties that offer best price conditions. Now, INA sells gas to wholesaler HEP, which in turn sells to local distributors and the latter provide the gas to households, all at regulated prices. Experts have said that the price hike would happen because the market gas price was by 15% higher than the regulated one last year but yet, none of the experts wanted to forecast what price increase for households the liberalization will bring. HNS leader and former economy minister Ivan Vrdoljak said on Thursday that the price of gas for households might rise by 15-20% this year.

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