The Hungarian oil company MOL has launched a new arbitration proceeding against Croatia and is seeking compensation for damages caused by the government’s anti-inflation measures in 2022 and 2023 when it imposed price caps on the natural gas market.
MOL argues that these measures forced the INA oil and gas company, of which MOL has a controlling interest, to sell domestic natural gas to the national electric utility HEP at well below market prices. For its part government maintains that all of its measures were based on regulations and aimed at the security of the supply of natural gas to Croatian citizens.
In a statement, the government claimed that due to the extraordinary growth in natural gas prices, more than 122 thousand households could have been left without a supply of natural gas and that more than a thousand other users would have suffered the same fate, including schools, daycare centres and hospitals. The statement goes on to say that the government also adopted temporary measures including the use of domestically produced natural gas.
The statement also notes that in the arbitration proceeding, Croatia will be represented by the State Attorney’s Office, which, in cooperation with other state institutions, will undertake all of the necessary measures in a bid to protect Croatian interests in line with its international legal obligations.
Energy sector expert Jasminko Umićević feels that MOL’s arbitration has no legal basis: “Insomuch as MOL is demanding compensation for damages incurred by illegal measures by the government, then they’re completely wrong. The laws on energy and the natural gas market explicitly authorize the government to adopt decisions to protect the supply of natural gas to citizens, households and protected categories of the population. These measures must be temporary, and the government’s measures were temporary.”
Umičević concluded that he feels that this latest arbitration bid by MOL is just a continuation of its attempts to secure for itself massive financial gains through constant pressure on the Croatian Government.
This view was echoed by fellow industry expert Ivica Jakić: “Government was protecting the interests of Croatian citizens, Croatian industry and the economy, and set the price that it felt it needed to set, and it has every right to do so. On the other hand, the government is the minority owner in INA and MOL is the majority owner. MOL is now trying, in any way possible, to demonstrate that they suffered material damages, hrt.hr reports.
