Gas prices to surge in Latvia as of January 1

Take note – story published 2 years ago

Natural gas tariffs for households will rise from 1 January 2022, depending on the amount of consumption, by anywhere between 54.2% to 93%, according to the statement in the official publication Latvijas Vēstnesis December 10.

For households consuming up to 250 cubic meters of natural gas per year, the differentiated final trade rate with value-added tax (VAT) and excise duty will increase by 54.2% in the first half of 2022, from €0.71472 per cubic meter to €1.10209 per cubic meter, while for households consuming between 250 and 500 cubic meters of natural gas the final tariff will rise by 66.9%, from €0.57912 to €0.96649 per cubic meter.

For households consuming between 500 and 25,000 cubic meters of natural gas a year, the final tariff will increase by 93% - from €0.41668 per cubic meter to €0.80405 per cubic meter.

The fixed part of the payment for natural gas will remain unchanged in the first half of the year. 

“Latvijas Gāze” noted that as from January 1 2022, households purchasing natural gas at the regulated tariff will have a much smaller increase in the price of natural gas than the total market price of natural gas.

The company indicated that in the first half of 2022, final tariffs on trade in natural gas for households will increase by 3.8 cents per kilowatt-hour (kWh) for each kilowatt-hour consumed, including VAT and excise duty if natural gas is used as fuel. The fixed fee for the distribution of natural gas will remain unchanged at EUR 3.27 per month with VAT, at the authorized load of up to 6 cubic meters per hour. For example, for a household that uses natural gas for cooking and consumes four cubic meters per month, the average monthly payment will be around €7.67, instead of the previous €6.12.

As natural gas prices in Latvia are linked to Western European natural gas trade stock indexes, the economic and geopolitical events in these markets which have led to a sharp rise in natural gas prices since April 2021, also have an impact on Latvian residents' costs for natural gas.

The cold winter in the first quarter of 2021, as well as the recovery of the economy following the Covid-19 crisis, has led to a sharp increase in demand for natural gas not only in Europe but around the world, particularly in Asian markets, leading natural gas prices to skyrocket.

Natural gas consumers using up to 25,000 cubic meters experience two tariff changes a year - on January 1 and July 1.

Gas tariffs in 2020 were reportedly the lowest in the past ten years.

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