Heating gas prices will not rise next year; tariff changes published

Take note – story published 1 year and 6 months ago

On Thursday, the Saeima adopted in the final reading amendments to the law in order to ensure that households or related users using gas for heating would not see their gas payments increase on January 1, 2023.

It could cost the State €24 million, which will have to be paid as compensation for the company Latvijas Gāze (LG).

Amendments were tabled by Ilze Indriksone (National Alliance (NA), Ainars Latkovskis (New Unity), Edgars Tavars (United List), Viktors Valainis (Union of Greens and Farmers), Jānis Grasbergs (NA) and Raivis Dzintars (NA).

The amending annotation explains that it has already been achieved in advance that households using natural gas for heating are charged a reduction of EUR 30 per megawatt-hour (MWh) from the regulated tariff of EUR 108.7 between July 1, 2022 and April 30, 2023. This means households actually have to pay EUR 78.75 per MWh.

The new tariff as of January 1, 2023 for which this aid would be applied would be significantly higher. This situation would not apply to those who purchase natural gas for heating on the free market.

In order to ensure that connected users continue to receive the same support as users purchasing natural gas for heating on a free market from January 1, 2023, the law is simplified by requiring that the gas price ceiling for heating is EUR 78.75 per MWh or EUR 0.07875 per kilowatt hour.

The amendments adopted provide support for households with high energy prices, thereby limiting the increase in energy poverty, as explained in their annotation.

In order to ensure that the tariff for related users is not increasing rapidly on January 1, 2023, a lump-sum payment will be made to the public trader, LG, to compensate for losses caused during the second half of 2022 as a result of differences in gas prices. The preliminary compensation costs are estimated at EUR 24 million, which will not have an impact on the government budget.

Gas tariffs will fall for those with bigger consumption

On December 8, Latvijas Gāze published its new tariffs as of January 1, 2023. Tariffs on natural gas will decrease for households with higher consumption but will increase for households with low consumption, according to the statement in the official publication Latvijas Vēstnesis.

The abovementioned price ceiling will still apply, so in reality, households using gas for heating will no feel the jump.

For households consuming up to 250 cubic meters of natural gas per year, the differentiated final trade tariff with value-added tax (VAT) and excise duty will increase by 11% from 2023 - from €1.8252 per cubic meter to €2.02508 per cubic meter. For households consuming between 250 and 500 cubic meters of natural gas, the final tariff will fall by 31.1% - from €1.6896 per cubic meter to €1.16354 per cubic meter. For households consuming between 500 and 25,000 cubic meters of natural gas per year, the final tariff will fall by 23.8% - from €1.52715 per cubic meter to €1.16354 per cubic meter.

A tariff calculator (including state aid) is available on the Latvijas Gāze website.

The fixed share of the payment for natural gas distribution services will increase for all.

For natural-gas users with annual consumption of up to 25,000 cubic meters, tariffs change twice a year - January 1 and July 1.

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