Government package of measures: Cheaper electricity until September 30, cheaper gas for another year…

The government, at its meeting on Thursday, regulated the implementation of the fourth package of measures to protect households and the economy from rising prices, with a total value of 1.7 billion euros, which will come into effect on April 1.

The largest part of the government’s aid package relates to mitigating the rise in energy prices, for which the state will provide 1.18 billion euros, 169 million euros is allocated for inflation protection, and 347 million euros for special subsidies and incentives.

Today, the government determined by regulation that the price of electricity for households, the public and non-profit sectors, and entrepreneurs will remain at the same level until the end of September as in the autumn package, which is valid until March 31 and came into effect on October 1 last year.

Households will thus pay for semi-annual consumption up to 2500 kilowatt-hours (kWh) an average price of 59 euros per megawatt-hour (MWh) until September 30 this year, and for consumption above that, an average of 88 euros. The measure for households applies to a total of 2,115,552 measuring points and is worth 82 million euros.

Cheaper electricity for the public and non-profit sector remains at an average price of 62 euros per megawatt-hour, the measure is worth 50 million euros, covering 13,080 users, and applies to kindergartens, schools, colleges, retirement homes, non-governmental organizations, institutes, religious communities, municipalities, cities, state institutions, utility companies, and others.

The price of electricity for small businesses for semi-annual consumption below 250,000 kWh also remains at 62 euros per megawatt-hour, with the measure covering 80,804 users, and the value of the measure reaches 116 million euros.

There are just under a thousand large consumers, and for semi-annual consumption greater than 2.5 gigawatt-hours (GWh), in the next six months, they will continue to pay 230 euros per megawatt-hour. Consumption up to 2.5 gigawatt-hours, but more than 250,000 kilowatt-hours, will continue to be calculated at an average price of 180 euros per megawatt-hour. The value of the measure for subsidizing the consumption of larger economic entities amounts to 348 million euros.

– With this regulation, we continue to protect Croatian citizens and the economy -, said Minister of Economy and Sustainable Development Davor Filipović, who particularly emphasized the large number of craftsmen and small and micro entrepreneurs, for whom the price of electricity at 62 euros per megawatt-hour significantly eases business operations.

‘Prevented a 70 percent increase in gas prices’

Additionally, the regulation defines that until April next year, the price of gas for households, the public and non-profit sectors, and all micro, small, and medium-sized enterprises with an average annual consumption of up to 10 GWh will not change, with a total value of the measure being 150 million euros.

The direct discount on the bill for households using gas amounts to 13.3 euros per megawatt-hour, while the amount of support for entrepreneurs is 0.0199 euros/kWh.

– We have prevented a 70 percent increase in gas prices -, emphasized Filipović.

Also, until April next year, the unit price of thermal energy for all thermal systems remains unchanged. The value of the measure is 267 million euros and applies to 159,000 customers (e.g., in Zagreb, Sisak, Zaprešić, Velika Gorica) and covers 98 percent of the delivered thermal energy.

Reduction of fees for renewable energy sources for over 200 entrepreneurs

A conclusion was also adopted regarding the support measure for compensating the rise in costs for thermal energy used for technological purposes by industrial and other business consumers of thermal energy, which involves the adoption of a temporary framework for state aid measures in crisis situations, in the context of and consequences of Russia’s aggression against Ukraine, given that some industrial business entities have seen a significant increase in costs related to thermal energy.

– With this conclusion, we plan to create such support to mitigate those costs that have increased multiple times -, said Filipović.

As explained in the conclusion, support is planned to be granted to thermal energy customers whose business is endangered and who are not covered by the regulation on eliminating disturbances in the domestic energy market and for whom it is necessary to create the mentioned support program. – Support under this measure is granted in the form of direct non-repayable funds -, it is added.

The government also adopted a regulation on the criteria for paying reduced fees for renewable energy sources and high-efficiency cogeneration, which reduced the electricity consumption criterion and thus expanded the circle of users of the reduced fee. According to the regulation, the right to a reduced fee will be granted to entrepreneurs with an annual consumption of 500 MWh, while previously it was available to those with a consumption of one GWh.

– The Ministry of Economy has developed a support program, which has also been approved by the European Commission, based on which over 200 entrepreneurs will be enabled to pay reduced fees, amounting to 104 million euros, thus helping the Croatian economy -, said Filipović.

There is also a change in the basket of products whose prices are fixed, so the pork shoulder and neck are removed from the basket, while imperial meat is added, and the fixed price will now apply to eight products.

According to the proposal, the price for edible sunflower oil would be lower – 1.72 euros per liter (previously 1.86 euros), while the same prices would remain for milk, flour (plain and fine), sugar, whole chicken, and minced pork, and for imperial meat, it would be 3.79 euros per kilogram.

Compensation for part of the cost of diesel fuel

A regulation was also adopted on the compensation of part of the cost of diesel fuel used as fuel in commercial road passenger transport, proposing a subsidy of 0.16 euros per liter of diesel for carriers.

According to Deputy Prime Minister and Minister of the Sea, Transport, and Infrastructure Oleg Butković, this regulates the continuation of assistance to carriers performing commercial road passenger transport for the period from April 1 this year to March 31, 2024.

– Given that the rise in diesel fuel prices inevitably reflects on the increase in commercial transport prices, with analyses indicating that the cost of diesel accounts for between 30 and 35 percent of the total costs of carriers, the proposed form of subsidy amounts to 0.16 euros per liter, representing a reduction of 11.4 percent compared to the currently prescribed maximum price of euro diesel, thus maintaining a reduction in the total costs of carriers by 3.7 percent -, he said. The estimated total value of this government measure amounts to 10.6 million euros, he noted.

For farmers and fishermen, nearly 41 million euros

The package of measures intended for farmers and fishermen is worth nearly 41 million euros.

With the conclusion on assistance to needy citizens in supplying firewood, as stated by Minister of Agriculture Marija Vuković, it enables the mitigation of the negative effects of rising energy costs related to firewood, which have led to a significant increase in the cost of living. Additionally, it helps socially vulnerable categories of citizens who heat with firewood.

For the household category, a five percent discount on regular prices from the price list of Croatian forests has already been approved. With the adoption of this measure, as she stated, the discount on the price of firewood for the household category will increase to a total of 20 percent for a quantity of 350,000 cubic meters.

This measure will cover about 35,000 households that use firewood as an energy source, and the estimated value of the measure is around 4.25 million euros. Priority in the allocation of firewood will be given to users of guaranteed minimum compensation.

To mitigate the negative economic effects on the operations of entrepreneurs engaged in wood processing and furniture production, the government has also adopted a small value support measure for entrepreneurs engaged in wood processing and furniture production in Croatia.

The support involves, as Vučković stated, the allocation of non-repayable targeted funds for investments in green and energy-efficient technological and spatial capacities, digitalization, and marketing. The measure will be financed from the state budget and is worth 3.98 million euros.

For the fisheries and aquaculture sector, a small value support measure is planned, which involves the allocation of non-repayable funds to entrepreneurs in the fisheries and aquaculture sector, including subsectors of commercial fishing at sea, freshwater aquaculture, shellfish farming, processing of fisheries and aquaculture products, and local action groups in fisheries. The expected number of users of this measure is around 1,200, Vučković reported, noting that the measure is worth 4.3 million euros.

The government has also adopted a conclusion under which support will be granted for investments in the use of renewable energy sources in the agriculture sector. The measure is worth 10 million euros and will be financed 80 percent from the European Agricultural Fund for Rural Development and 20 percent from the state budget.

For compensating the rise in production costs in the livestock and crop production sectors, 26.9 million euros is allocated. Support will be granted to entities engaged in production in sensitive sectors of livestock (cattle, pig, sheep, goat, poultry, horse breeding, and beekeeping) and crop production (fruits, vegetables, flowers, medicinal and aromatic herbs, sugar beets, seed corn, and vegetable seeds).

A support measure for small dairies for compensating part of the costs of collecting milk is also planned. By granting support, Vučković said, the aim is to maintain the existing level of production and processing of cow, sheep, and goat milk, which is usually purchased by small dairies from the most vulnerable small producers.

This enables the continuation of small dairies’ operations and preserves milk production on small farms, Vučković noted, adding that the measure is worth one million euros.