The differentiated final trade tariffs for natural gas with excise tax and value added tax (VAT) will range from -11% to +11%, depending on the annual consumption of the user. This is mainly due to the fact that the differentiated final trade tariff for natural gas consists not only of the price of natural gas, but also of the differentiated tariffs for distribution system service and fees for transmission service.

The increase in tariffs of the natural gas system operator Gaso from 1 January 2023 will have an impact on the final trade tariffs for natural gas ranging from 1.7% to 3.2% depending on the consumption group of users.

The final trade tariffs for natural gas have been calculated in accordance with the amendments made on 8 December of this year to the Law on Measures to Reduce the Extreme Increase in Energy Resource Prices and based on the trade price of natural gas of EUR 118.14/MWh. For households consuming up to 250 cubic metres (up to 2635 kWh) of natural gas per year, in the period from 1 January to 30 April 2023, the differentiated final trade tariff with VAT and excise tax will increase by 11% from EUR 0.1732010/kWh to EUR 0.1921691/kWh, but for households consuming from 250 to 500 cubic metres of natural gas (2635.1–5269 kWh), the final tariff will decrease by 11% from EUR 0.1240332*/kWh to EUR 0.1104120**/kWh. While for households consuming from 500 to 25,000 cubic metres (5269.1–263450 kWh) of natural gas per year, the final tariff will increase by 1.7% – from EUR 0.1086184^*/kWh to EUR 0.1104120^**/kWh due to the revision of the distribution system operator tariffs.

Table 1. Price of natural gas and final trade tariff for natural gas with excise tax and VAT (21%)

* Tariff taking into account the state aid of EUR 0.03/kWh provided for in the Law on Measures to Reduce the Extreme Increase in Energy Resource Prices.

** Tariff taking into account the amendments made on 8 December 2022 to the Law on Measures to Reduce the Extreme Increase in Energy Resource Prices, also setting the natural gas price ceiling for related users.

From 2023, the fixed fee of the distribution system operator Gaso will also increase from EUR 3.27 per month including VAT to EUR 3.99 per month including VAT, for a permitted load of up to 6 m³/h.

For households that use natural gas for cooking only and consume 4 m³ per month, the payment for natural gas will be approximately EUR 12.10 per month, instead of the current EUR 10.56. For households that use natural gas for water heating only and consume 25 m³ per month, the payment for natural gas will be approximately EUR 33.08 per month, instead of the current EUR 35.94. Whereas, for households that use natural gas for heating and consume an average of 180 m³ per month, the payment will change from EUR 209.31 to EUR 213.42 per month.

“In 2022, we have 4 times higher prices for natural gas compared to last year. By selling almost half of the total natural gas portfolio to merchants outside Latvia, we have achieved good profit results. However, the household segment in the 2^nd half of 2022 caused losses to Latvijas Gāze in the amount of EUR 24 million, because in the 2^nd half of 2022 the price of natural gas on the Western European Exchange (TTF) was well above the trading price of EUR 107.34/MWh, according to which tariffs for households in the 2^nd half of 2022 were calculated (see Figure 1). According to the methodology approved by PUC, the losses incurred in the previous period should be included in the tariff calculation for the next period, which would be too much of a burden for households in this heating season. Therefore, in close cooperation with the Ministry of Economy and the Public Utilities Commission (PUC), a solution has been found to compensate for the losses from the state budget and to also set a natural gas price ceiling for related users with an average monthly natural gas consumption above 221 kWh. We appreciate the amendments made on 8 December 2022 to the Law on Measures to Reduce the Extreme Increase in Energy Resource Prices, as we can apply a lower price of natural gas to households. If such amendments were not made, the final trade tariff for natural gas could increase from 51.5% to 58.7% depending on consumption,” explains Aigars Kalvītis, Chairman of the Board of Latvijas Gāze.

Figure 1 Prices of natural gas on the exchange and LG trading prices for households, EUR/MWh