The government said on Monday that the annual report on the operation of the Croatian Energy Regulatory Agency (HERA) and the report on the agency's budget performance in 2021 were not satisfactory, and sent this opinion to Parliament.

There has been no substantial progress since last year, considering the personnel changes on HERA’s Management Board that occurred in the meantime, which is why the report is considered unsatisfactory, Economy Minister Davor Filipovic said at a cabinet meeting.

HERA’s report does not reflect the fast-evolving processes in the energy sector, and the government has recommended that these processes be updated to provide a clearer insight into HERA’s role in the energy sector, notably between HERA and end users, the minister said.

It is not clear from the report that HERA influences energy prices in Croatia through its decisions as an independent regulator, and the section of the report relating to the efficiency of the energy market and competition, the implementation of the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT), and cooperation with the Croatian Competition Agency and the Croatian Financial Services Supervisory Agency was not given due attention, Filipovic said.

HERA has been under increased public scrutiny over its questionable role in giving the OMS company the licence to trade in natural gas. The company played a key role in organising a scam with the sale of natural gas from the INA company, defrauding it of over 1 billion kuna (€133m). HERA’s role in this affair was criticised last week by the parliamentary Committee on Economic Affairs, which demanded the resignation of HERA’s leading people.