18:18 / 02.04.2022.

Author: Domagoj Ferenčić

Government's anti-inflation measures are having a limited effect as price volatility continues

Dolac Market in Zagreb

Dolac Market in Zagreb

Foto: Slaven Branislav Babic / PIXSELL

The conflict in Ukraine has only served to further exacerbate the rampant global inflation. In Croatia, following massive price hikes in fuels, natural gas, electricity and basic food goods, government has undertaken several measures with the goal of mitigating the negative effects of the inflation on households. The measures included capping prices on gasoline and diesel fuels, as well as lowering the Value Added Tax on natural gas, electricity and food goods.

The head of Retail Trade in the Croatian Employer's Association Martin Evačić says that some retailers had already lowered their prices at the end of February, when government first announced its measures, but added that the lowered Value Added Tax cannot absorb price inflation entirely, as producers are constantly having to adjust their prices: “We have been told of a number of price adjustments for April, and obviously all of us have some stock in our warehouses, so we'll raise prices as new goods are put on the market. The highest price hikes will be for meats, paper products, oil and flour.”


And while the president of the Independent Trade Unions of Croatia, Krešimir Sever, has applauded the government measures, he added that political leaders and citizens need to be aware that prices will continue to rise in the coming period: “Due to price increases in livestock feed, blue diesel and mineral fertilizer, we have an entire series of announcements on price increases, for vegetables, fruits, a price increase in grains is expected in the fall, it can also be expected that there will be price increases for meet in the foreseeable future, while the baking industry has already announcement it will begin with new price increases.”


Sever concluded that one way for citizens to respond to inflation is to create publicly available "blacklists" that would monitor which retail chains have raised or lowered their prices, and called on consumer protection groups to provide assistance in setting up the lists.


Meanwhile, the western sanctions against Russia could also cost the Croatian crude oil transportation company JANAF, which is part of the Adria Oil Pipeline. And while JANAF does not operate on the Russian market, it does deliver crude oil to the Serbian oil and gas company, NIS, whose majority owner is the Russian company Gazprom Neft. If the sanctions are not amended, JANAF will no longer be able to supply oil to NIS. JANAF's oil storage system is an international system of oil transport from the Omišalj Terminal to domestic and foreign refineries in Southeast and Central Europe.


Source: HRT

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