17:31 / 13.10.2021.

Author: Domagoj Ferenčić

Government to hold off on intervention into rising gas prices

Members of the Economic and Social Council

Members of the Economic and Social Council

Foto: Screenshot / HRT

The Economic and Social Council held a meeting today at which its members agreed to hold off on a possible government intervention into the sky-rocketing gas prices. Meanwhile, the European Union has announced that its member states are encouraged to take action to protect vulnerable groups hardest hit by the price hikes.

Following the recent price hikes in gas prices, which reached an all-time high two days ago, it was announced on Wednesday that for the time being there are no plans to reduce excise duties to lower the price of fuel. This was announced after today's meeting of the Economic and Social Council, which consists of government, employer and union representatives, by the council's president, union leader Vilim Ribić: “The primary characteristic of these price hikes is exogenic and government's reach is limited in terms of price interventions on the market. The situation is difficult, but it's not dramatic. If things continue to develop in this vein then government will intervene. That's the gist of today's discussion.”


What was agreed at the council is that what could truly help those with the lowest incomes is to raise the minimum wage, something that government is expected to decide on by the end of this month. Employer's representative Mihael Furijan noted that even economically stronger countries have not been able to resolve the problem of rising gas prices, adding that it is important to continue investing into the energy sector is the only way to reduce Croatia's dependence on energy imports.


In parliament, the opposition disagreed with the conclusions reached at today's meeting of the Economic and Social Council, warning that the consequences of rising prices would be disastrous for the living standards of Croatian citizens. They insist that Government needs to react now.


The steep rise in gas prices was also discussed in Brussels today, with the European Council announcing that the issue will be discussed at the summit planned for the end of next week. Meanwhile, the European Commission issued proposed measures for mitigating the negative consequences of the price hikes. Both the commission and the council reminded that the price of fuel falls under the purview of individual member states. Energy Commissioner Kadri Simson said that member states have the right to allow the deferral of bills, to issue vouchers to the most vulnerable groups in society, and to implement other measures in line with European legislation, if they are being affected by large increases in energy prices: “Which means that our rules already allow, and in fact encourage, the member states to take action.”


The commissioner also called on member states to use the funds they have received from the European Union to mitigate the negative consequences of the price hikes: “There is no limit to how much of this can be used to protect vulnerable households.”


Source: HRT

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