Hungary's MOL stated on Saturday that it had initiated an arbitration process against Croatia over the measures which the Croatian government imposed on the gas market in 2022 and 2023 whereby INA was ordered to sell gas supplies to the state-run HEP power provider at prices under the market prices.

“MOL confirms that it has launched the arbitration against the Republic of Croatia in a bid to offset the damage caused to us by Croatia’s measures imposed on the gas market in 2022 and 2023,” this Budapest-based Hungarian group stated in a press release.

These measures imposed an obligation on INA to sell gas supplies to HEP under the market price.

MOL is the single largest shareholder in INA, holding 49.1% (4,908,207 shares), while the Croatian state holds 4,483,552 shares (44.8%). Private and institutional shareholders hold 608,241 shares (6.1%).

MOL did not elaborate any further information in its short press release on Saturday.

Earlier in the day, local media reported that MOL had initiated the new arbitration proceedings before the Washington-based International Centre for Settlement of Investment Disputes (ICSID). The press release makes no mention of the value of the arbitration.

The decision made by the Andrej Plenkovic government in mid-September 2022 that the price of natural gas which the state-owned HEP power company received from the INA oil and gas company would be €41 per megawatt hour is the subject matter of the application for arbitration.

This regulated price was in force until September 2023 and it was then extended and it referred to all gas produced in Croatia.

Later the regulated price was changed to €47 per megawatt hour.

Commenting on the decision, Economy and Sustainable Development Minister Davor Filipović said in October 2022 that the price of natural gas which the state-owned HEP power company received from the INA oil and gas company would be €41 per megawatt hour, concerning the households.

The price was regulated according to the decision made by Croatia’s HERA agency.

At the time, the market gas price was €227 per MWh.