Gas Prices in Croatia to Rise in 2019, and Again in 2020

By 8 February 2019

While the news is definitely not unexpected, it's never a good thing when the public finds out about the increasing prices of a commodity. That's exactly what happened today, as HERA (Croatian Energy Regulatory Agency) announced the increase in the gas prices for later in 2019, but also another one coming in 2020.

So, from April 1st the natural gas prices will be almost 7% higher for the end-consumers. The increase is explained by the increased wholesale component of the price, which they say has gone up by 9.7%. That new price will be applicable by March 31st next year, and it can be expected that another increase in the price will happen then, because of the situation on the natural gas market in the world.

The final price after this change that the Croatian homes will be paying is not known yet, as not all of the companies who serve as middle-men have the same price.

The initial calculations have projected that the possible increase of the gas prices might be somewhere around 10%, and in the last couple of days, there was talk about the possibility that the government might propose the reduction of the VAT bracket for the natural gas distribution to the end-consumers. It is currently taxed at the general, 25% rate, while some other, comparable commodities are taxed at a 13% rate, such as electricity and water supply and garbage removal. Some sources from the government have confirmed off the record that there have been discussions of the reduction of the VAT rate for the natural gas, especially after the food has also been placed in the 13% bracket at the beginning of 2019. Unfortunately, the change has not happened yet, but if the government wants to make that move, there's still ample time to do it before the end of March.

In 2021, it is announced, the price of the natural gas for the end consumers will stop being created this way, as it will be completely liberalized and competing companies will be able to attract customers by offering them lower prices, similarly to what has happened with the electricity prices in the past decade in Croatia. 

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