Winter support period and budget allocation
Croatia is spending about €170 million to keep household electricity, gas and heating costs below market levels during winter. The programme is designed to shield consumers from wholesale volatility while delaying a return to full price pass-through. The measures run from Oct. 1, 2026 to March 31, 2027.
Of the total envelope, about €126.4 million is allocated to electricity support. Another €43.7 million is earmarked for gas and district heating. The government estimates the scheme will hold the average household electricity bill at around €43.33 per month.
Officials estimate that without intervention the average household electricity bill would be about €58.25 per month. Gas support is expected to prevent an otherwise estimated average price increase of roughly 16%. Transmission and distribution tariffs charged by HOPS, HEP ODS and Plinacro will also remain unchanged throughout the support period.
Link between retail bills and wholesale market conditions
The policy provides households with another winter in which energy costs are relatively predictable. It also increases the separation between consumer bills and the underlying economics of electricity and gas markets. This separation becomes more relevant as Croatia faces rising expenditure on grids, renewable integration and generation.
Wholesale energy markets have normalised compared with the extreme levels seen in 2022. However, they remain exposed to gas-price shocks, hydrology swings and regional electricity scarcity. The government’s approach absorbs part of that volatility through subsidies and frozen tariffs.
The effect is to reduce near-term inflation while shifting more market risk onto the public sector. The intervention also reduces incentives for households to adjust consumption in response to scarcity when wholesale costs rise. For utilities and network operators, extended tariff restraint can create additional operational constraints.
Grid investment needs under regulated tariff restraint
Croatia requires substantial investment in transmission and distribution infrastructure as renewable capacity expands. At the same time, HEP must continue financing generation, flexibility and hydro assets. Keeping regulated charges unchanged can widen the gap between investment needs and consumer pricing.
Zagreb is therefore extending an energy-crisis policy into what officials describe as a more normal market environment. The immediate benefit cited for the programme is political and inflationary stability. For market participants, the package indicates that Croatian retail energy prices will remain politically managed even when wholesale prices move differently.
