Prime Minister Andrej Plenkovic announced on Wednesday that his government would take a three-pronged approach in tackling the skyrocketing prices of natural gas, which involves vouchers for 64,000 socially vulnerable households, updating the formula currently used to calculate gas prices, and possibly lowering the VAT rates on energy, which is currently 13 percent for electricity and 25 percent for gas.

“The government is carefully analyzing trends in energy prices and the measures other European Union member states are taking. Currently, we are considering all the options that will protect the standard of citizens,” Plenkovic said at a panel event.

He said that the government’s activities would be conducted in three segments with the basic aim of relieving the impact on households and citizens.

The first segment is a measure of social transfers with the Prime Minister announcing increased allowances for socially vulnerable citizens. Today that is a maximum allowance of 200 kuna (€27) and 64,000 socially vulnerable households will receive vouchers.

“Our plan is to adopt a new regulatory framework to increase the scope of those allowances and expand their implementation to gas, not only electricity. We will expand the groups allowed to claim those allowances,” said Plenkovic.

The second part of the package refers to “reviewing all elements in the final calculation of the price of gas and electricity,” state agency Hina reported. “Here we will lean on the important role HEP has as the national energy company which in these circumstances, has the strength to take on some of the burden,” Plenkovic said.

The third element is to review the taxation system and VAT. Currently, the VAT rate on electricity is 13 percent and 25 percent for gas. “We are preparing a substantial fiscal analysis of impact, we are considering a reduction to buffer the impact on citizens and the economy,” said Plenkovic.

Plenkovic said that Croatia still has significant domestic production of hydrocarbons, which covers 20 percent of its needs, whereas with gas the country covers 30 percent of its needs. He also mentioned the LNG Terminal recently built on the island of Krk, saying that Croatia has “secured gas supplies from all parts of the world.”

“We recognised the strategic significance of this project for Croatia’s energy independence and to diversify supplies,” he said, adding that the terminal gives Croatia a “different dimension” on Europe’s energy map.

Last year 21 ships with LNG arrived at the terminal and unloaded about 3 million cubic meters of liquefied natural gas, which provided 1.7 billion cubic meters of gas that was handed over to Croatia’s distribution system. This year 24 ships are planned.