Diesel spike raises food price concerns in Croatia

The Croatian government is expected to take steps next week to offset a new fuel price surge triggered by the closure of the Strait of Hormuz, which has driven oil prices sharply higher over the past month.

Diesel prices are rising faster than gasoline, raising concerns about knock-on effects across the economy, particularly on food prices, as most goods are transported by truck.

Marijan Krpan, head of Croatia’s Hydrocarbons Agency, said diesel reached a record US $1,670 per metric ton on Mediterranean markets on Thursday.

“The government will analyze all the data we’ve prepared before making calculations. There are mechanisms available to influence prices, and it is likely to respond again,” he said, referring to previous interventions by Andrej Plenković’s government to cap fuel prices.

Economic analyst Ljubo Jurčić said the government could lower or eliminate excise taxes or adjust VAT to ease prices for consumers, though this would strain the budget.

“If the government offsets the increase this way, there will be less money for other spending,” Jurčić said.

Officials and experts say Croatia’s energy supply remains secure for now. However, higher fuel costs, especially diesel, are expected to push up prices of other goods, said Marijana Ivanov of the Croatian Exporters Association.

“Diesel is rising faster than other fuels, and since it powers long-haul transport, those additional costs will be passed on to users,” she said. “A bigger concern may be the combined impact of higher diesel and fertilizer prices, which could further drive up food costs.”