Croatia's national oil and gas company Ina will have to sell all the natural gas extracted in Croatia to the state-owned power board Hep, and it also must increase its production of natural gas by ten percent from what it originally planned, the Minister for Economy and Sustainable Development, Davor Filipovic, said on Wednesday.

Ina is co-owned by the Croatian government, which holds a 45-percent stake in the company, and Hungary’s oil company Mol, which holds close to 49 percent of the stock.

He said that “all the gas produced in Croatia would remain in Croatia.” He added that the gas supply security task force met yesterday and that its recommendations to the government were for Ina to increase its gas production in Croatia by 10 percent and sell all of the gas it produces to Hep.

Hep will, in turn, distribute, that is, sell that gas to households, hospitals, kindergartens and all other institutions. According to Filipovic, this would be a temporary measure, recommended for the period from 1 October 2022 to 31 March 2023.

According to government regulation, Ina is obliged to sell natural gas for an amount of 0.3425 kuna per kilowatt hour (€0.05/kWh), and Hep is obliged to distribute that gas to various government-owned gas distributors in order to compensate for losses in gas distribution, for thermal energy buyers from an independent heating system, for the public service for households, and for gas buyers from the business sector.

Furthermore, in the period from 1 October 2022 to 31 March 2023 Ina is to increase its production of natural gas by 10 percent compared to that planned, “in line with its technical and technological capacity.”

The gas sold to Hep under the government’s regulation is primarily needed to ensure the security of supplies in the event of possible supply disruptions in the categories of households and businesses.

In addition to the necessary quantities of gas for the smooth functioning of gas distributors (about 18 million cubic meters), there is a large potential problem of a shortage of gas for a potential 122,560 customers in the household category who intend to switch from market gas providers to the public gas supply service due to the extremely large market disruptions amid huge price hikes.

The majority of those customers are located in areas supplied by Gradska Plinara Zagreb-Opskrba public gas company (71,023 customers), and it is necessary to ensure an additional 128 million cubic meters of gas for those customers in a timely manner.