Ukraine-Russian conflict drives gas and electricity prices up in Croatia

As previously announced, gas and electricity prices in Croatia will go up drastically on Friday. In a bid to mitigate the impact these price hikes will have on the living standard of citizens, a series of government measures are also set to come into force on April 1st.

According to the measures, the growth in prices for households will be limited to 9.6 percent for electricity and 20 percent for gas. The Value Added Tax for gas will be cut from 25 to five percent. Tax on food goods and the agricultural sector will also be reduced, while government's gas and electricity voucher program for the most vulnerable groups in society has been expanded. Prime Minister Andrej Plenković feels that the measures are the best possible solution at this time: “I think that with our all-encompassing package, we have succeeded, to highest degree possible, in ensuring that the impact of these price hikes on households in the months ahead of us is limited as much as possible.”

Meanwhile, Deputy Prime Minister and Finance Minister, Zdravko Marić, feels that the market will also help citizens with regard to their food purchases: “As far as retail sales of food are concerned, we have a highly competitive market, and it too should provide an additional contribution, so that the effect of the tax reduction is transferred to the benefit of the consumer.”

Russian President Vladimir Putin announced on Thursday that as of Friday all foreign buyers of Russian gas will have to settle their accounts in rubles. Failure to do so will be considered a breach of contract by the purchaser: “In a situation in which the financial systems of Western countries are being used as a weapon, when companies from those countries refuse to honor their obligations towards Russian banks and businesses, when our assets in Euros and dollars have been frozen, it makes absolutely no sense to use the currencies of these countries. Should they try to pay according to the old model, this new influx of dollars or Euros could just as easily be blocked. This development was expected, especially since some western politicians have already spoken about this. Based on the statements from some of these politicians, they are prepared to ignore the interests of their own citizens, in order to please their masters across the pond. Russia values its business reputation, and we will continue to honor the conditions of every contract, including gas contracts, and we will continue to deliver gas according to the price defined in the existing long-term contracts.”

Germany, France and the United Kingdom have all rejected the idea of paying for Russian gas in rubles, with the French Economy, Finance and Recovery Minister Bruno Le Maire saying that it is up to western countries to prepare for the possibility that as of Friday they will no longer have access to Russian gas.

Source: HRT