In a number of municipalities, the drop in gas prices also means a reduction of heating rates, but not in all. Rīga's heating supplier Rīgas siltums does not plan to cut the tariff.
December began with great frost. The average monthly temperature was relatively low — two degrees below the monthly norm. Data from Inchualna's natural-gas storage show that four times more gas was removed from storage in December than in November. Accordingly, heating bills for December jumped.
This and last week, the new bills are received by Rīga residents. The capital city's house manager company Rīgas namu pārvaldnieks (RNP) said that there are different situations, but the examples sent show that the increase in heating costs for apartments is more than 50%. For example, the heating of an apartment of 60 square metres cost €80 in November and €130 in December.
The fact that bills have grown rapidly is also indicated by the company Rīgas siltums.c
“While it is seen that overall energy consumption is declining [compared to the previous year] and people are struggling to save, the bills will be higher than in the previous month. Our calculations show that they could be around 40% higher,” company spokeswoman Linda Rence said.
Asked if they could afford to pay the bills, the people met in Rīga's Purvciems district answered in different ways.
“Nothing can be done. I have a son, Group 2 disabled, he helps me. He also has €100 some sort of pension. And me too. So let's say you can survive. But nothing can be done about the heating” said pensioner Ņina Valentīna.
“If it's the price of peace, why not? I look at it differently. Everything has its own price. If it is the price of peace – sure,” said Gvido.
“The November bill wasn't very big, but I'm looking forward to this month with concern. The previous month was €140 for a half-month, but now the full month and cold weather. The bill will be tangible,” Viktors said.
The price of gas has recently fallen significantly in Europe: this week the stock exchange price has dropped below €70 per megawatt-hour, the level of the previous heating season. The main reasons are that concerns about gas shortages in Europe have subsided significantly and the market has started to adapt to the new situation.
The sector does not foresee such sharp price jumps as in the second half of last year, at least in the coming months.
“It may be affected by weather conditions, severe anomalies. If a very big cold wave suddenly returns, there might be jumps. But in general, we can expect a relatively stable, peaceful time in the natural gas market until the summer season,” said Gunārs Valdmanis, executive director of the Latvian Association of Electrical Engineers.
The fall in the price of gas does not mean that it is immediately followed by cheaper heating. For example, it does not change anything for Rīga, because the company Rīgas siltums does not plan to reduce the tariff.
“We have acted responsibly at the beginning of the heating season, and energy resources have already been purchased. […] Accordingly, a heating tariff has been developed based on the prices of this resource,” said Linda Rence.
Much of the heat is not produced by the company itself but purchased from Latvenergo's large thermal power plants. Latvenergo uses gas purchased last year for an average of EUR 130 to EUR 140 per megawatt hour, said Dmitrijs Juskovs, board member of the company. That is near twice the price of gas at this time on the stock exchange. Juskovs said that until the most expensive gas is spent, heat production will not become cheaper.
The drop in gas prices has allowed a number of other cities' heating companies to announce tariff cuts. For example, in Ikšķile and Mārupe, where tariffs exceeded €300 per megawatt hour, they would be lower by a third.
Reductions in higher heat rates:
- “Ikšķiles māja” 324 EUR/Mwh → 203 EUR/MWh
- “Mārupes komunālie pakalpojumi” 312 EUR/MWh →192 EUR/MWh
- “Ķekavas nami” 279 EUR/Mwh → 209 EUR/MWh
- “Lielvārdes remte” 286 EUR/MWh → 189 EUR/MWh
- “Babītes siltums” 270 EUR/Mwh → 192 EUR/MWh
Of the large cities, the tariff will also decrease by a third in Rēzekne and Jūrmala.
- “Jūrmalas siltums” 225 EUR/MWh → 149 EUR/MWh
- “Rēzeknes siltumtīkli” 217 EUR/MWh → 152 EUR/MWh
- “Rīgas siltums” 183 EUR/MWh
- “Daugavpils siltumtīkli” 176 EUR/MWh
- “Jēkabpils siltums” 171 EUR/MWh → 137 EUR/MWh
The head of Jūrmala heating company said that in December the gas supply agreement with Latvenergo expired, while the new contract has been concluded at a price linked to the exchange, which is now much more favorable. The reduced tariff in Jūrmala could take effect on March 1.
Meanwhile, the gas company Latvijas Gāze does not plan to cut the tariff.
New bills were also received this week by direct Latvijas Gāze customers. The company refuses to mention specific figures for which bills have increased because the situations are too different and all bills have not yet been sent out. Latvijas Gāze also said that despite the gas price exchange, heating will not become significantly cheaper for customers this winter, because gas is provided forward, and the law allows the company to change tariffs only twice a year.