From 1 January, natural gas prices for households will change

From 1 January 2022, the increase in the price of natural gas for households purchasing natural gas at the regulated tariff will be significantly lower than the increase in the total price of natural gas in the market.

In the first half of 2022, the final tariffs for natural gas trade for households will increase by 3.8 euro cents for each kilowatt hour (kWh) consumed, including value added tax (VAT) and excise duty if natural gas is used as the fuel.

For households consuming up to 250 cubic metres (up to 2,635 kWh) of natural gas per year, the differentiated final sales tariff with value added tax (VAT) and excise duty will increase from 0.0678226 euros/kWh to 0.1045819 euros/kWh in the first half of 2022, but for households consuming from 250 to 500 cubic metres of natural gas (2635.1 - 5269 kWh), the final tariff will increase from 0.0549548 euros/kWh to 0.0917141 euros/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 from 0.03954 euros/kWh to 0.0762993 euros/kWh.

The fixed price for the distribution of natural gas remains unchanged - 3.27 euros per month with VAT, at the permitted load of up to 6 cubic metres per hour. For example, a household that uses natural gas for cooking and consumes 4 m3 per month will have an average monthly payment of around 7.67 euros, instead of the previously paid 6.12 euros.

By using the monthly payment calculator, it is possible to calculate the new monthly payment for natural gas. The first payment according to the new tariffs must be made by 20 February. We invite clients to connect and make payments in the client portal, where the amount of the new payment will be displayed, taking the previous payments into account.

As natural gas prices in Latvia are attached to the indices of the Western European natural gas exchanges, the economic and geopolitical events taking place in these markets have resulted in a sharp rise in natural gas prices since April 2021, reaching historically highest price levels, and they have also affected natural gas costs for inhabitants in Latvia.

The cold winter in the first quarter of 2021, as well as the economic recovery after the Covid-19 crisis, have led to a sharp increase in demand for natural gas not only in Europe but worldwide, especially in Asian markets, leading to record natural gas prices. Producers of liquefied natural gas (LNG) have been selling LNG cargo delivered to European markets (including the Baltics) in previous years to Asian markets, where the price of natural gas is even higher than in Europe, thus creating a shortage of resources. The certification process for the Nord Stream 2 pipeline is also delayed. The “Green Deal” introduced by the European Union to reduce CO2 emissions and global warming has also reduced the use of fossil fuels - coal, oil and lignite - in the energy sector of Europe, further increasing the demand for natural gas. While the production of renewable energy capacity is still insufficient.

In 2021, the price of natural gas increased several times compared to 2020, even exceeding 90 euros per megawatt hour. Current price forecasts also suggest that the price of natural gas will remain at this price level during the winter months. Nevertheless, through the prudent injection of natural gas into the storage and the purchase of most of the natural gas needed by households in the summer months, when prices were still relatively low, we have been able to provide the price of 50.63 euros per megawatt hour for households, which is about 41% lower than on the stock exchange, protecting households from even higher price increases during the heating season.

We remind you that the total natural gas payment paid by households consists of five components:

  • the price of natural gas, which is affected by fluctuations in the price of the resource on world markets and which is calculated in accordance with the methodology approved by PUC,
  • the fee for the transmission service, which is calculated and agreed with the PUC by JSC “Conexus Baltic Grid”,
  • distribution operator services, the tariffs of which are calculated and coordinated with the PUC by JSC “Gaso”,
  • as well as excise and value added tax, regulated by the state.

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