The heating season will end with the reduction of heat energy tariffs in several places in Latvia / Article

“The average thermal energy tariff in Latvia has decreased every month since the end of 2022 and, judging by the currently evaluated tariff projects, it will decrease a little more. From November 2022, when the average thermal energy tariff reached its highest level of 131 euros/MWh, in May this year it will have already decreased to 86 euros/MWh. Despite the decrease in the price of fuel in Latvia, the changes in the tariffs are different in the end users’ bills. ,” commented PUK chairman Alda Ozola.

From May 1 this year, the heat energy tariff will be lower – in Ikškile by 23% (69.47 euros/MWh), in Dobele, Krimuna and Tērvete by 21% (66.15 euros/MWh), in Jurmala by 20% (70.99 euros /MWh), in Daugavpils by 19% (65.86 euros/MWh), in Cēsis by 14% (71.12 euros/MWh), in Aizkraukle and Aizkraukle parish by 8% (59.53 euros/MWh), in Gulbene by 6% (71.42 euros/MWh), in Grobinė, Kapsedė, Cimdenieki and Robežnieki by 4% (93.20 euros/MWh), in Jēkabpils, Kūkas and Spungēni by 4% (58.56 euros/MWh), in Kocēni by 3% ( 69.52 euros/MWh), in Salaspils and Saulkalne by 2% (69.90 euros/MWh), in Valmiera and Viestura Square by 0.9% (71.92 euros/MWh).

On the other hand, from May 2 this year the tariff will decrease in Olaine and Pārolaine by 26% (66.19 euros/MWh), in Jaunolaine and Stūnīši by 1% (88.03 euros/MWh), from May 3 – in Talsi by 8% (70 .77 euros/MWh), from May 4 – in Prevos by 8% (67.56 euros/MWh), from May 5 – in Bročeni by 0.2% (89.90 euros/MWh), from May 7 – In Ludza by 3% (75.45 euros/MWh) and from May 9 – in Ilūkste by 17% (74.85 euros/MWh).

PUK explained that for several merchants, the thermal energy tariff in May, compared to April of this year, will decrease even within the limits of 14-26%, taking into account that new contracts for fuel supply have been concluded.

Previous contracts for the purchase of fuel were concluded for a longer period of time, often for the entire heating season, as a result of which prices remained unchanged for several months. There are also merchants for whom the changes are not so rapid, considering that they happened gradually already in the previous months.

“Last year, the changing market conditions and the uncertain geopolitical situation forced heat supply traders to be cautious and conclude long-term fuel supply contracts at a fixed price. When the previous fuel supply contracts expire, new ones are concluded, and this has a significant impact on heat energy tariffs, taking into account wood chips and natural gas At the end of this heating season and thinking about the next one, the challenge for heat supply merchants is to find the most suitable solution for the lowest possible fuel price in the interests of the population – to buy fuel in short-term transactions or to buy it immediately for the whole season, thereby also fixing a guaranteed price,” stated PUK head Alda Ozola.

At the same time, even though, thanks to the changes in the price of fuel, heat energy tariffs are currently mostly decreasing, it can be safely predicted that they will no longer be at the same level as, for example, in 2021, PUK stated.

The increase in costs can be observed in other costs of merchants in connection with the provision of heat energy supply services. The increase in these costs – wages, repair works, bank loan interest rates, etc. – has an impact on the costs of providing heat energy supply services to merchants as well. In general, compared to previous years, the cost of heat energy production without fuel has slightly increased in all heat energy tariff items.

PUK stated that it receives draft tariffs of thermal energy merchants every week for evaluation, accordingly, changes in tariffs occur regularly – every month throughout the year, and for one merchant, the tariff can change several times a year – either increase or decrease depending on the price of fuel.

The regulator explained: if the actual price of the new fuel is higher than what was previously included in the applied tariff, the merchant has the right to set a higher tariff. On the other hand, if the actual fuel price is lower than the previously applied tariff, the merchant is obliged to apply a lower tariff to the users.

PUK, evaluating the submitted tariff projects, follows up – if the price of fuel for a merchant is higher than the current market price, then PUK demands an explanation.

PUK currently evaluates 19 complete heat supply tariff projects and four heat supply tariff projects determined by merchants themselves.