In the second half of 2022, the final tariffs for natural gas trade for households will increase by 6.86 eurocents for each kilowatt hour (kWh) consumed, including value added tax (VAT) and excise duty if natural gas is used as 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 by 65.6% from 0.1045819 euros/kWh to 0.1732010 euros/kWh in the second 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 by 74.8% – from 0.0917141 euros/kWh to 0.1603332 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 by 89.9% – from 0.0762993 euros/kWh to 0.1449184 euros/kWh. Fixed payment 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.
In the second half of 2022, for households that only use natural gas for cooking and consume 4 m3 per month, the payment for natural gas will be approximately 10.56 euros per month, instead of the previous 7.67 euros. Whereas, for households that use natural gas for heating and consume an average of 180 m3 per month, the payment will change from 148.00 euros to 278.15 euros per month.
Reasons for the price increase
“The increase in natural gas energy costs was already felt by households in the first half of this year, but it was significantly lower than the total increase in natural gas prices in the market. Thanks to the well-thought-out strategy of Latvijas Gāze of injecting natural gas into the storage in the summer months, when prices were relatively low, we were able to provide 50.63 euros per megawatt hour (euros/MWh) to households in the first half of the year, which was approximately 50% lower than the average price in stock exchanges in this period; therefore, we protected households from even higher price increases during the heating season. In addition, the increase in tariffs for households with higher consumption was also offset by state support from January to April. However, due to the increase in the price of natural gas on the world market, it is no longer possible to buy such cheap natural gas, and the cheap gas bought last season has been used; therefore, natural gas must be bought as it is and tariffs for the second half are already calculated at 107.34 euro/MWh,” explains Aigars Kalvītis, Chairman of the Board of Latvijas Gāze.
The increase in natural gas tariffs can be explained both by the high purchase price forecast for natural gas on the Western European Exchange (TTF) in the next half year and by the previous half-year price records, as we provided a small part of household consumption through pipelines, thus creating larger natural gas costs which as a correction must be taken into consideration according to the methodology of SPRK when calculating the tariff for the next period. The highest point this year was reached in April, when the TTF front month index reached 130 euros/MWh. Current market forecasts also show that gas will still cost in the range of 90-100 EUR/MWh until next spring.
How the new natural gas payments to households will be announced
At the end of July, household customers who pay for natural gas using the flat-rate method will receive a new monthly amount and payment schedule. The first payment according to the new tariffs must be made by 20 August. Households for which the annual report is scheduled for July or August will receive the new flat-rate payment schedule in due course, in July or August respectively.
We want to emphasise that customers who have already made an advance payment should follow the new payment schedule and make payments in order to avoid creating large amounts for payment when they receive their next annual report.
For the convenience of customers , a calculator is available, with the help of which the approximate new monthly payment for natural gas can be calculated. However, we encourage customers to use the customer portal, as from 1 August, the current amount for payment will be displayed in the portal, taking into account previous payments, and making payments in the customer portal is free of charge.
We invite all household customers to actively report the meter readings via the client portal in the period from 27 June to 1 July, so that we can apply tariffs according to the customer's actual consumption when creating the annual report.
