In a statement issued in response to some media reports, the ministry recalled that a decision went into force on 30 June 2008 aimed at cushioning the rise in electricity prices for some households and that the government extended it three times, in July 2009, June 2010 and December 2010, with the last extension expiring this past June 30.

Since the government did not extend the decision, electricity bills for some categories of buyers will change for the amount of the subsidy they received until June 30, which was HRK 7.49 per month on average, the ministry said.

The monthly subsidies totalled HRK 10.8 million, or about HRK 130 million annually, the statement added.

The HEP power company said on its website yesterday that households which consumed less than 3,000 kWh of electricity per year and had been subsidized clients over the past three years lost the subsidy on June 30 and that as of July 1, all households would pay electricity at prices established by the tariff system for the production, transfer, distribution and supply of electricity.

According to the company, there are about 2.1 million households in Croatia and about 1.6 million were subsidized.

The right to the subsidy was introduced on 1 July 2008, when the government approved HEP's request to raise the price of electricity by 20 per cent but also adopted measures to cushion the increase, which depended on annual consumption.

In mid-2008, power bills did not go up for about 960,000 households whose annual consumption was below 2,000 kWh. The price went up five per cent for households consuming 2,001-2,500 kWh and 10 per cent for those consuming 2,501-3,000 kWh. For these households, the government paid the difference of the 20 per cent increase.