Starting from October 1, residential and small commercial consumers in Croatia can expect an increase in electricity and gas prices as the government plans to reduce the scope of energy subsidies, although some measures will remain in place. While subsidies won’t be entirely eliminated, adjustments are being discussed, with details of the new package expected next week as relevant ministries begin more concrete discussions.
It is anticipated that the government may lower the electricity consumption threshold for subsidies on a semi-annual basis. Complete removal of subsidies for all households is unlikely, as it would place a heavy burden on households already strained by inflation. Currently, electricity is subsidized at a guaranteed price of 59 euros/MWh for consumption up to 3,000 kWh and 88 euros/MWh for consumption above that threshold.
Minister of Economy Ante Susnjar stated that the government is considering adjustments to these measures in line with European Commission guidelines. Any changes are expected to be mild, with prices likely remaining within existing frameworks or experiencing only slight increases. These adjustments should not negatively impact citizens or small businesses, while large businesses are already paying market prices.
The Croatian Employers’ Association has urged the government to continue subsidizing gas prices for small businesses, warning that gas bills could rise by 30% in the fall. The association pointed out that domestic industry and large enterprises have long been paying market prices for energy, so these changes will not significantly affect them. Despite the market price of gas staying below the 180 euros/MWh cap, ongoing geopolitical instability makes it important to maintain this cap as a safeguard for companies. Small businesses, in particular, are concerned about the potential impact of rising energy costs.
