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Daugavpils racks up heating debts

The municipal heating company of the city of Daugavpils, Daugavpils siltumtīkli, is taking a €4.3m credit line to buy up gas for heating and to be able to heat the inhabitants' houses in winter, reported Latvian Radio on Wednesday.

The financial mishaps are caused by the inhabitants' debts about a service they've already received, more than €3.6m in total.

The credit line won't be a cause for further stress on the wallets of the inhabitants, the company assured. Due to lower gas prices the expenditure can be reduced by up to 20% in comparison to last year. Latvijas Gāze, the Latvian gas monopoly, estimates that the price for natural gas will stay low, so the current heating tariff (51 cents/MWh without VAT) will stay unchanged.

Of course, the expenses for inhabitants depend on whether the looming winter will be a particularly cold one.

People who live in Daugavpils' flats deal with the debts in different ways. One inhabitant, Ludmila, told Latvian Radio that she is trying to return the debt, but she manages to do that only partially. It is, however, important to pay to ensure that heating stays turned on during the winter.

As of now, the debt to Daugavpils Siltumtīkli, according to chairman of the board, Andrejs Kuzņecovs, sits at €3.645m. It was €40,000 smaller last season. The company hopes that the debt will shrink.

"As of now, we're seeing an increase in returned debts, more than last year, [..]" said Kuzņecovs, adding that the heating season is set to start on October 1.

The company is taking the line of credit because of the inhabitants' debts and also to have a guarantee that they'll be able to pay for the gas in time. Jānis Lāčplēsis, the mayor of the city, said that now it's a common practice already, and the €4.3m aren't to be spent completely, but the sum will allow to company to use funding as necessary to pay for gas.

Andrejs Kuzņecovs said that the company pays Latvijas Gāze for deliveries at a faster rate than the customers pay their bills.

"Accordingly, in the winter period when gas is used a lot more, there's a discrepancy between what a user of heat pays and what we have to pay to Latvijas Gāze. That's why we use a line of credit year by year and we cover it within a year, by the next heating season," said Kuzņecovs.

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