Expects prices to drop by a fifth on average
“Seeing that prices can be reduced now, without waiting for July 1, we have started conversations with VERT and with Ignitis.” At the same time, we have prepared the necessary legislation.
For now, we have agreed that the price could decrease by at least 20 percent from the current price. This can be implemented as early as April,” Energy Minister Dainius Kreivys announced on the social network.
“This would lead, for example, to a second group of consumers who use gas for heating, whose bills could decrease by around 10 euros per month,” comments The Postedia town hall.
Current residential natural gas rates:
VERT asked the company “Ignitis” to differentiate the gas tariff into two parts – until April 1 and from April 1.
“We hope to receive a decision and by the end of February we plan to approve the tariffs for domestic consumers, which could come into force from April 1,” the regulator says.
Supply company Ignitis tells The Postedia that it is currently carrying out calculations and will submit them to VERT.
“We proposed to the regulator and the ministry an initiative to reduce the price of natural gas for domestic consumers earlier than the usual tariff revision. In other words, we propose to approve the revised prices in April, without wait until July,” comments Laura Beganskienė, head of PR projects at Ignitis.
“If it is possible to revise tariffs earlier than usual, the price of gas for domestic consumers of all groups could fall by around 20 cents per cubic meter from April 1,” she says.
Since January this year, gas has become cheaper for the first group of consumers (those who use gas for cooking) by 7 cents per cubic meter, for the second group (those who heat their homes) by 4 cents and for residents who consume the most – also by 4 cents.
The expert reminds us of autumn
When the new gas prices come into effect, the heating season in Lithuania will probably already be over.
When asked whether it would not be better to review gas prices every quarter, Valdas Lukoševičius, president of the Lithuanian Heating Suppliers Association (LŠTA), believes that this should not be done, because stability is important in the regulated price.
“It is very easy to reduce the price of gas, but when it starts to become more expensive in autumn and winter and it is necessary to increase the price again, then there is great dissatisfaction with the “increase in prices”, comments V. Lukoševičius. in “The Postedia”.
Typically, he explained, most states try to keep regulated prices stable by changing them once or, at most, twice a year.
“This is simply a populist solution in response to people’s feelings. But in the fall there will be another price increase, there will be outrage, maybe there will be another government , then they will swallow this “pill”. It is not good when the regulated prices change frequently,” says the LŠTA president.
According to him, some users then begin to adapt to such volatility.
“And then people try to manipulate in every way – to use, not to use, to transfer to the next quarter for settlements. They balance the accounts, there are all sorts of frauds – this is not good , but I understand the desire to please,” says V. Lukoševičius.
Would promote greater flexibility
GREEN, when asked whether the more frequent recalculations that have taken place recently would become the norm, said it would require legislative changes, but it would give the board more flexibility in the event of larger changes in the market. fat.
“In the long term, we believe legislative changes would be necessary, both in the natural gas and electricity sectors. In our opinion, it would be possible to revise existing laws by giving more flexibility to the regulator, in the event of larger price changes, to revise tariffs more often,” the commentary said.
The Energy Minister said that during the spring session, legislative amendments would be submitted to the Seimas, which would allow the regulator to revise gas prices more flexibly and quickly, ELTA reports. Now, after revising the rates based on market prices, the changes can only come into effect after 30 days.
“Why will it only come into force on April 1?” Indeed, the dates when this must be done are very clearly recorded – 30 days after the decision. And we are currently drafting legislation that will remove those 30 days. Once again, we have to wait for the Seimas session,” D. Kreivys told reporters on Wednesday.
The market has calmed down
Minister D. Kreivys claims that the price of gas on the market has fallen significantly – from 60 euros to 30 euros per MWh – and it is very likely that it will remain so for all these years.
According to Ignitis, the purchase price of natural gas on the market has fallen, storages are full, flows are operating without interruption, so the situation on the market is relatively calm.
“When purchasing natural gas to meet the needs of domestic consumers, we expect that the average gas purchase price in the second quarter of 2024 could be around 20 euros per MWh lower than that forecast for the same quarter in autumn 2023”, says L. Beganskienė.
The price of natural gas on the market:
On the natural gas exchange “GET Baltic”, operating in the Baltics and Finland, gas cost on average 41.5 euros per megawatt hour in January, a decrease of 5 percent. less than in December (43.5 euros per MWh) and 40 percent. This is less than last January, when the average gas price in the region was 69 euros per MWh.
“The gas price curve is falling across Europe due to the high filling level of gas storage. This trend is also reflected in the Baltic-Finland region. In the event of a relatively mild winter, the supply of gas exceeds demand, leading to lower prices,” says Giedrė Kurmė, director of the Baltic Stock Exchange GET, in the report.
Last fall, VERT announced that the price of gas (as a product) for the first half of 2024 included in the tariffs is approximately 47.68 euros per MWh. At that time, the tariffs for the second half of 2023 included the price before compensation – 101.85 euros, after compensation – 53.08 euros per MWh. Currently, the State does not apply compensation for either electricity or gas.
Source: The Delfi