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Gaso plans to increase tariffs for natural gas distribution services from next year

The natural gas distribution system operator Gaso has submitted to the Public Utilities Commission (SPRK) new tariffs for natural gas distribution services, which envisage an increase from January 1, 2024, both for the variable part of the tariffs and for the fixed part, according to a statement published in the official gazette Latvijas Vestnesis.

For users who consume up to 2,635 kilowatt hours (kWh) of natural gas per year, the tariff is planned to increase by 22.4 percent – from EUR 22.9503 per megawatt hour (MWh) without value added tax (VAT) to EUR 28.0907 per MWh without VAT.

At the same time, the tariff for users consuming between 2,635.1 and 263,450 kWh of natural gas during the year is planned to increase by 35.9 percent to EUR 12.1219 per MWh, for users consuming between 263,450.1 and 1,327,788 kWh the tariff is planned to increase by 8.5 percent to EUR 9.2978 per MWh, for users consuming between 1,327,788.1 and 13,277,880 kWh the tariff is planned to increase by 5.9 percent to EUR 6.1972 per MWh, and for users consuming between 13,277,880.1 and 132,778,800 kWh the tariff is planned to increase by 2.9 percent to EUR 4.0262 per MWh.

The groups of users consuming between 132,778,800 and 210,760,000 kWh and users consuming between 210,760,000 and 1,353,800,000 kWh are to be merged and their tariff is to be set at EUR 2.0085 per MWh.

At the same time, for users consuming more than 1,353,800,000 kWh of natural gas per year, the tariff is to be increased by 0.2 percent to EUR 0.4013 per MWh excluding VAT.

The variable part of the tariff will increase for some users with seasonal consumption of natural gas and decrease for others.

For users who have opted for the specialized tariff and consume between 2635.1 and 263 450 kWh of natural gas per year, the tariff is planned to decrease by 57.2 percent to EUR 14.5664 per MWh. For users consuming between 263,450.1 and 1,327,788 kWh, the tariff is planned to decrease by 15.1 percent to EUR 13.65465 per MWh, while for users consuming between 1,327,788.1 and 13,277,880 kWh, the tariff is planned to increase by 22.6 percent to EUR 8.6319 per MWh.

At the same time, the fixed part of the tariff for users with a permitted load of up to six cubic meters per hour will increase by 39.9 percent, from EUR 39.63 per year excluding VAT to EUR 55.44 per year excluding VAT.

For users with a permitted load of 6.1 to 10 cubic meters per hour, the fixed part of the tariff will increase by 35.5 percent to EUR 147.72 per year, for users with a load of 10.1 to 16 cubic meters per hour by 32.9 percent to EUR 231.48 per year and for users with a load of 16.1 to 25 cubic meters per hour the tariff will increase to EUR 346.80 per year or 30.5 percent.

For users with a permitted load between 25.1 and 40 cubic meters per hour, the fixed part of the tariff will increase by 22.1 percent to EUR 482.16 per year, for users with a load between 40.1 and 65 cubic meters per hour the tariff is planned to increase by EUR 808.80 per year or by 23.8 percent, while for users with a permitted load above 65 cubic meters per hour the fixed part of the tariff will increase by 10 percent to EUR 9.48 per year.

In calculating the tariffs for the natural gas distribution system service, Gaso revised the structure of the differentiated distribution tariffs – the cost ratio between tariff groups approved in the draft tariffs was changed to take into account the reduction in the volume of natural gas transferred to users and the changes between tariff groups.

The company pointed out that the tariff changes are necessary because natural gas prices have exceeded the price level planned for the current tariff period several times over, resulting in additional costs for Gaso. The tariff changes are also related to the costs of ensuring the continuous and reliable operation of the natural gas distribution system, which Gaso was unable to recover during the tariff period due to a significant decrease in the volume of natural gas transferred to users.

Ilze Petersone-Godmane, Chairwoman of the Board of Gaso, pointed out that “it is no secret that the consumption of natural gas in Latvia has decreased significantly”. The Central Statistical Office reported that the total consumption of natural gas in Latvia has decreased by 30 percent compared to 2021.

According to Petersone-Godmane, the decrease is also visible in Gaso – the number of users has decreased by almost 16,000 compared to the end of 2021. Taking into account the decrease in the amount of natural gas transferred to users, it is necessary to make adjustments in the tariff structure and to rebalance the ratio between the tariff groups.

Gaso’s revenue last year was EUR 52.46 million, down 11.3 percent on 2021, and the company suffered a loss of EUR 1.751 million, compared to a profit the year before.

Gaso was established at the end of 2017 to separate the distribution system operations of Latvijas Gaze and meet the European Union and national requirements for ensuring the independence of the natural gas distribution system. Gaso is the only natural gas distribution system operator in Latvia. The company provides security, technical services and accounting for natural gas consumption. Gaso is a commercial company of national security importance.

At the end of July 2023, Eesti Gaas, owned by Estonian investment company Infortar, became the sole owner of Gaso.

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