Croatia caps motor fuel prices for 30 days to help economy

ZAGREB, Oct 14 (Reuters) - The Croatian government said on Thursday it would cap the price of motor fuels for 30 days to reduce the impact of the recent surge in fuel prices on living standards and the economic recovery.

“We will cap for a period of 30 days the price of gasoline at 11.10 kuna ($1.72) per litre and the price of diesel at 11.00 kuna per litre,” Prime Minister Andrej Plenkovic told a cabinet session.

He said the move was aimed at mitigating the impact of higher fuel prices on the pace of economic recovery. After last year’s economic contraction of 8.4% due to the COVID-19 pandemic, Croatia sees its economy growing 8.5% this year.

This week local prices of the motor fuels reached fresh highs of up to 11.66 kuna per litre of diesel and up to 11.99 kuna per litre of gasoline.

Croatia’s August consumer prices rose 3.1% year-on-year. For this year the central bank expects average inflation of 2.3% compared with 0.1% in 2020. For 2022 it sees average inflation easing to 2.1%.

$1 = 6.4691 kuna Reporting by Igor Ilic; Editing by Kirsten Donovan