Croatian oil and gas company INA, said on Thursday the
government's decision to set a new regulated price at which it sells gas to
state-owned power utility HEP would have a negative effect on its
revenues.
Earlier in the day, the government adopted a decision to cut by
12% to 0.2289 kuna ($0.0317/0.0299 euro) per kWh the tariff at which wholesalers
sell gas to suppliers of retail customers. The government also decided to cut
the tariff at which gas produced domestically is sold to wholesalers by 7% to
0.1715 kuna per kWh.
The new gas tariffs will be valid between April 1
this year and the end of March next year.
The tariff cut should lead to
an average drop of 7%-10% in household gas prices, economy minister Ivan
Vrdoljak said.
INA, which saw its consolidated loss rise 26% to 1.9
billion kuna in 2014, said in a statement that the negative impact on its
revenues from the tariff decision is seen at 47 million kuna in the
April-December 2015 period.
In February 2014, the government in Zagreb
obliged INA to sell domestically produced gas at a regulated price to HEP which
was tapped as wholesale gas supplier for a period of three years, taking over
from INA's loss-making gas trading arm Prirodni Plin.
The decision
obliges INA to sell a portion of its natural gas production for household
supplies to HEP as the wholesale market supplier while also requiring that gas
distributors also purchase their gas from HEP.
INA added in its Thursday
statement that the government decision taken last February had a "negative
material effect on the company of 260 million kuna" in 2014.
Hungary's
MOL owns 49.08% of INA and the Croatian government controls a further 44.84%. In
September 2013, the two sides launched talks to renegotiate the terms for the
company's management.
According to the latest data available on the
website of Croatia's energy regulatory agency, HERA, a total of 28.7 billion kWh
of gas were delivered to the market in 2013 with domestic production
contributing 13.1 billion kWh.