Inflation-Curbing Measures Not Enough for Croatian Transport Sector

By 11 March 2022

March the 11th, 2022 - Despite the fact that the Croatian Government is set to put its inflation-curbing measures into force on the 1st of next month, for the very hard hit Croatian transport sector, which is still reeling from the pandemic, it won't be enough.

As Poslovni Dnevnik/Suzana Varosanec writes, the Croatian transport sector and bus carriers are already on their knees owing to the pandemic, the restrictions on travel and a lack of help from the state, and now with inflation and soaring fuel and oil prices, things have been made ten times harder. Oil prices on reference markets have risen even further this week, and they are appealing to the government for the introduction of some concrete measures to help preserve business across Croatia.

Government measures - freezing margins and reducing excise duties on petrol and diesel, which may temporarily help average people, are not enough for the enfeebled Croatian transport sector.

Sectoral measures are proving necessary, and neighbouring Slovenia already has them: according to a defined methodology and clear proof of the increase in energy costs compared to 2021, business operations are directly co-financed through temporary co-financing of costs caused by rising energy prices.

In addition, bus companies operating in Slovenia have been signing public service contracts for fourteen years now, which have built-in so-called ''diesel clauses'', which make them resistant to shocks caused by the continually rising fuel prices.

All of this was reported by the Coordination of Public Liner Carriers at HUP, headed by President Hrvoje Mestrovic, with an additional explanation. As excise duties are fixed within the structure of fuel prices, and VAT is charged on the total price, state revenue is significantly higher with each increase, while lower excise duties will ultimately mean lower refunds to bus carriers (last year it amounted to just over 160 million kuna).

According to Mestrovic, a solution that could help the Croatian transport sector and more specifically bus companies cope with the pandemic fallout and the now sky high fuel prices, in addition to the measure of co-financing the sector's operations in extraordinary circumstances, is to speed up the signing of public service contracts for counties with diesel clauses.

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