Gov't says household gas to be 7-10% cheaper as of April 1

Gov't says household gas to be 7-10% cheaper as of April 1

The price of natural gas for households could go down by 0.15 - 0.25 kuna per cubic metre in early April, or an average of 7-10%, shows a projection presented by Economy Minister Ivan Vrdoljak at a government session on Thursday.

The projection is based on two decisions made by the government today, which will affect household gas prices.

Under the decisions, the national gas producer in Croatia - INA - is obliged to sell gas to the wholesale supplier - the Croatian Power Company (HEP) - at a price of 0.1715 kuna per kilowatt hour (kWh), which is almost 7% lower than the current price of 0.1842 kuna per kWh. The wholesale supplier HEP is expected, in turn, to sell gas to public distributors of gas for households at a price of 0.2289 kuna per kWh, which is close to 12% less than the current price of 0.2595 kuna per kWh.

The new prices are expected to be in force from 1 April 2015 to the end of March 2016.

As of next month, the price of gas per cubic metre for gas distributors will be 0.30 kuna or 12% lower, said Vrdoljak.

He was hopeful that most of the price decrease would be felt by households.

The Croatian Energy Regulatory Agency (HERA) must make a decision by the end of March on how much the distributor will lower the gas price because the price also includes distribution costs, said Vrdoljak.

The Economy Ministry estimates that the price of gas for households will go down by 0.15-0.25 kuna per cubic metre or an average 7-10%.

Vrdoljak underlined that the price could not have been reduced before the winter because a regulatory year ended on April 1.

The gas price reduction is possible owing to domestic gas production, the minister said, adding that most of the gas consumed by households came from exploitation blocks in the northern Adriatic.

Those exploitation areas have no impact on tourism in Istria, which is the country's most developed tourist region, Vrdoljak said.

With additional, domestically produced gas we can count on gas prices going down further, but if we depend only on imported gas, that won't be so, said Vrdoljak.

Prime Minister Zoran Milanovic said that domestic gas production was also a matter of national security.

In making decisions, the government is guided primarily by national security as well as by principles of environmental protection, the PM said.

"These are the motives, rather than causing environmental harm," he said.