The gas price for Croatian households rises 22% and the electricity price will go up by 20% as of 1 May, the government decided on Friday.

Deputy Prime Minister and Economy Minister Radimir Cacic said that the costs of gas supplies for the average household would rise 22% which meant that the gas bill would be higher by 33 kuna.

A part of the national industry that is directly supplied with gas will pay the unchanged price, while the price of gas for schools, hospitals and some industry sectors will go down by 6.75%.

This will enhance Croatian products' competitiveness, the minister said.

The price of the generation, transmission and distribution of electricity to households will go up 20%, or HRK 40.24 kuna more in the average electricity bill.

The price of power supplies for the industry will also rise but not so much, because the government intervened to have a lower rise of electricity distribution and transmission prices, he added.

This is an act of facing the facts, Prime Minister Zoran Milanovic said, adding that this was bad news but somebody must say it.

It is on us to start other mechanisms, but we cannot influence this, the premier said.

Croatia imports 40% of the electricity it consumes, and a half of the remaining 60% is generated from hydro plants and the other half from imported gas and oil.

We buy oil and gas on the foreign market at global prices. The last electricity price rise was in 2008 and since then the crude oil price increased two and a half times, Cacic said, adding that the same applied to gas prices.

At the same time, the price of coal went up by only 8.21%, which is why coal power plants such as Plomin are important, the deputy prime minister said.

The power and gas price hikes will cover losses which the INA company's gas business makes and will enable the HEP power supplier to break even by the end of this year, he added.

He said that the gas price in Croatia was still lower than in neighbouring countries.

With the new electricity price, Croatia will reach 87 percent of the European Union average.

The news about the price hikes is the last bad news which began with the higher Value Added Tax, bankruptcy proceedings for the dockyards and companies such as the Dalmacijavino beverage maker, the Vjesnik newspaper, etc, Cacic said.