Market Liberalization to Cause Wave of Price Increases

Total Croatia News

Electricity, gas, motorway tolls…. wave of price increases coming soon.

Liberalization of several sectors in early April will lead to price increases, but no one yet knows how large the increases will be, because the supply chain is made of several elements and the government has not yet made any final decision, reports on February 27, 2017.

Gas prices could increase by as much as 25 percent. Average cost of gas per household, which currently amounts to 2,960 kuna, could rise to 3,630 kuna a year, if all the businesses in the supply chain maintain their existing margins. This means that average citizen could pay about 700 kuna more a year.

Electricity is also expected to be more expensive. “That will happen before the middle of this year, but the change will not be substantial, just a few percent, maybe 4, 5 or 6 percent. That is the situation in which we are, we have to find a way out”, said recently Environmental Protection and Energy Minister Slaven Dobrović.

President of Independent Croatian Trade Unions Krešimir Sever sent a letter to Prime Minister Andrej Plenković saying that any price increase would be “a nightmare” for consumers, but there was no result. “Just when we started expecting the recovery of household budgets and when last year’s low oil prices and deflation opened the space for citizens to slightly increase their spending, a new shock is coming”, said Sever.

That is not all. Tolls on motorways will also increase this summer, by 5 percent off season and by 15 percent during the summer months. “This is a price hike which is detrimental to national interests because it will endanger traffic safety, tourism and economy”, said traffic expert Željko Marušić. “In addition, it is unfair to burden Croatian Motorways public company with all the debts, since much of the debt was not created by the company”, said Marušić, adding that the debts are largely a fault of decisions made by governments at the time when the motorway network was being constructed.

However, when talking about toll increases on motorways, it should be noted that the majority of population strongly opposed allowing motorways to be given in concession, which would probably lead to restructuring of their business operations. “We certainly have to repay the loans, but it is not wise to shoot oneself in a knee”, said Marušić.

After the 15-percent increase in the price of tolls, the average price will be 6.9 euros per 100 kilometres, which will still be lower than in Italy (7.0), France and Portugal (7.1), and especially Spain (8.8) and Greece (9.3).

The government is at the moment trying to find a way to keep gas prices under control, at least until the local elections in May. “We need more time to decide on gas”, said Prime Minister Andrej Plenković. “Our political goal is that any changes in the market should not be felt by citizens.”

On Sunday evening, the Prime Minister held a secretive meeting with Finance Minister Zdravko Marić and Speaker of Parliament and MOST leader Božo Petrov. Rumours are that the topic was the price of gas.


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