A Week in Croatian Politics – HEP Scandal Dominates

Lauren Simmonds

croatian politics
Robert Anic/PIXSELL

July the 7th, 2023 – This week in Croatian politics, only one story has been dominating the headlines – yet another scandal with HDZ allegedly knee deep in it. Let’s unpick the HEP affair.

Plenkovic is accused of being knee deep in another scandal

PM Andrej Plenkovic has been accused of being involved in yet another scandal, this time involving gas and HEP. Reactions from others in Croatian politics have been brutal. Milanovic has called it an offence against the Croatian Constitution and against democracy, other politicians have jumped at the chance to slate HDZ and refer to them as cheats, thieves and liars. Marijana Puljak said that HDZ is constantly stealing from the Croatian people, and that it’s time for voters to either choose HDZ or their country. With DORH and HERA now investigating the situation, what exactly has gone on here?

Robert Anic/PIXSELL

Damage of ten million euros or more? Perhaps…

An enormous affair is currently shaking HEP and, surprise surprise, the government. Namely, as has been revealed over recent days, HEP has been selling its gas below any kind of acceptable price and losing around half a million euros per day as a result of that. According to the first estimates, so far the damage has already grown to about ten million euros, but in the end it could be much higher.

HEP claims that they’re being forced to sell their gas below the price at auctions because they no longer have a place to store surplus gas, and they accuse HDZ’s economy minister Davor Filipović of being late with a decision that would have prevented this entire situation.

The Prime Minister remained silent for a while, others in Croatian politics spoke out

Prime Minister Andrej Plenković had at first been entirely silent about everything for days. It was expected that he would speak after an event related to the Day of the Croatian Chamber of Crafts, which he attended, but he didn’t. Instead, government spokesman Marko Milić informed journalists at the last minute that only the Minister of Transport, Oleg Butković, would discuss matters. He has for some reason or another been commenting on this unfolding affair for days in the name of the government, although his department has absolutely nothing to do with it.

The Transport Minister says the problem is going to be solved

Igor Soban/PIXSELL

Butković said then that the government intended to solve the problem of the sale of excess gas that HEP buys from INA at regulated prices with a decree, and that everything will be explained to the public after the government session is held, where the topic would of course be on the table.

“The fact is that this gas is being sold at lower prices. We’re going to regulate that now, we’ll discuss that regulation at the government session you’ll then get all the information,” assured Butković, adding that “what happened will also be established” saying that “everything will be explained after the government session” once again.

We’ll find everything out: Who wrote to whom, who called whom, and who talked to whom…

To briefly recall, the Croatian Government initially passed the Regulation on eliminating disturbances on the domestic energy market back in September 2022, and according to it, INA had to hand over all of the gas it produces here in Croatia to HEP at a price of 41 euros per megawatt hour, which was then five times lower than the market price. That regulation expired at the end of March and no new one was adopted.

When asked if the government intends to provide any information on which companies purchased this surplus gas, he first answered: “You’ll get to know everything.” He then added that the Prime Minister ordered the Minister of Economy to look into everything and investigate.

Of every individual in Croatian politics, the public wants the PM to take responsibility

Patrik Macek/PIXSELL

The issue of selling off surplus gas, which (as stated above) HEP purchased from INA at a regulated price, was opened after Most’s MP Zvonimir Troskot asserted that HEP had been selling that gas significantly below the price and creating significant losses as a result.

Troskot claimed that HEP purchased gas from INA at a price of EUR 47.60 per megawatt hour, and then sold it on at a much cheaper price to suppliers through the Croatian Energy Market Operator, which is why in some cases it had been losing around 500,000 euros per day. An utterly staggering sum of money.

Information according to which HEP lost 10 million euros in gas surpluses in June alone was greeted in the Croatian Parliament on Tuesday by opposition members with total criticism, but also with demands for responsibility, not from the head of HEP or the Ministry of Economy, or indeed from anyone else in Croatian politics, but from Prime Minister Andrej Plenković himself.

Economy Minister: HEP is responsible for gas trading

Robert Anic/PIXSELL

Minister of the Economy Davor Filipović, whose work portfolio also conveniently includes the gas business, stated that the HEP Management Board is responsible for gas trading.

Prime Minister Andrej Plenković said on Monday that he had asked the Minister of the Economy to see what this situation was all about and that he expected a proposal accordingly.

HEP then stated that it has no influence on the sale, price and choice of buyers of the aforementioned surplus gas taken from INA, which is automatically dumped into the transport system due to the fullness of the warehouse.

Plinacro, the operator of the Croatian gas transportation system, announced on Tuesday that it doesn’t trade gas, nor does it sell it and it is fundamentally not responsible for any such trade transactions.

Plenkovic has been accused of having “signed everything off” despite “claiming to know nothing about this affair”

The accusations and allegations have been coming in so thick and so fast over recent days since the HEP affair was uncovered that it’s difficult to stay on top of who said what to who. The PM did hold a press conference eventually, and one journalist asked him if “he was even the prime minister at all”.

The weird world of Croatian politics has once again been shaken up by a scandal. It’s been a while. The PM recently held a press conference at which he stated that he found out about the huge gas scandal last Friday, after returning home from Brussels. It was also at that time, as the prime minister claims, that Davor Filipović also found out about it.

Almost a week has passed since the Croatian Prime Minister first received information about damages of more than ten million euros, and ultimately much more, but he has been accused of “doing nothing about it”.

Oleg Butković, who was the only one in Croatian politics actively speaking about this situation despite it having nothing to do with his ministry, said what Plenković also claims – that the government still doesn’t have the whole picture of the situation. He also claimed that the public hasn’t lost anything, and nor has HEP.

“We’re waiting for an analysis of the situation”

Luka Stanzl/PIXSELL

Yesterday, all eyes were on Plenković, answers were tirelessly awaited, and then the prime minister held one of the most bizarre press conferences to date. During it, he didn’t want to say anything specific about the gas affair. An odd move considering that was what everyone was eagerly awaiting.

All he said was that the government had made a decision that HEP no longer has to purchase all the gas produced in the Republic of Croatia from INA. Plenković didn’t answer the question of who actually bought gas from HEP at a negligible price either.

“At the moment we don’t have the full picture of everything that has gone on. We’ll ask for a complete analysis from Minister Filipović,” Plenković said, then began to brag that thanks to the government, HEP was buying gas at a “much more favourable price”.

The Prime Minister, in what has become well known as his typical style, deviated from the topic multiple times. Throughout this utterly bizarre press conference, he totally avoided giving any sort of concrete answer, and then when asked when he found out about it, he answered:

“On Friday, after returning from Brussels. As far as I understand, Minister Filipović also found out about it on Friday,” he said, and answered every subsequent question on the subject with “we’re going to investigate everything.”

“It isn’t the minister’s job to worry about how gas is bought and sold”

Only later on in the evening did Minister Filipović speak on HRT. You wouldn’t be wrong in assuming that he didn’t say anything concrete, and it’s worth highlighting only one of his (frankly strange) sentences: “It isn’t the minister’s job to worry about how gas is bought and sold,” he said. He then distanced himself from everything while repeating the same Plenković-esque mantra from the weirdest press conference in the world that “this is a complex situation and everything has yet to be determined.” When anyone in Croatian politics intends to do this, because it has been almost a week since they found out everything, it is not yet known.

Davor Puklavec/PIXSELL

DORH (State Attorney’s Office) and HERA (Croatian Energy Regulatory Agency) have launched an investigation into what exactly has happened in the latest scandal to have shaken the world of Croatian politics.


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