The government is going to nullify the obligation of the Croatian power provider (HEP) to purchase all the gas supplies which INA produces in Croatia, Prime Minister Andrej Plenkovic said on Thursday at the start of his cabinet's meeting.

The decree under which HEP is obliged to purchase those amounts of gas on the domestic market was adopted by the government in September 2022 in an effort to address disruptions of gas supplies on the domestic market.

Under the decree, INA was supposed to sell all the gas amounts produced in Croatia to HEP at the price of €41 per megawatt-hour, and when the decree was adopted, this preferred price was five times lower than the market price.

Now that sufficient supplies of gas are stored, the government will annul the decision obliging HEP to purchase the gas produced in Croatia from INA. The decree regulating the purchase of domestic gas supplies (at this preferred price) was intended to ensure sufficient amounts of gas in times of crises when gas prices were extremely high and to enable households to have affordable gas,” Plenkovic said.

He explained that the government’s decree enabled 120,000 households, that would have had problems with gas supplies, to have a safe provision of gas supplies.

Instead of market prices, this preferred and regulated price and the government’s decisions made it possible for schools, kindergartens, faculties, hospitals, homes for senior citizens, local administration, religious institutions, and NGOs to have affordable gas supplies, he underscored.

The premier announced a mechanism for compensation to gas suppliers supposed to provide gas for public services and wholesale traders that had to comply with the preferred prices while obtaining gas supplies at market prices.

Most party MP Zvonimir Troskot has recently raised the question of HEP selling gas supplies below the market price and thus accumulating losses.

Troskot claimed that HEP, obliged to buy gas supplies from INA at the price of €47.60 per megawatt-hour, sells those amounts via the Croatian energy market operator HROTE at considerably lower prices to other gas providers, losing about €500,000 per day.