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Published: 2/9/2014. Updated: 7/28/2017

Natural Gas prices


Prices in the gas sector shall be contracted and state regulated. Prices shall be regulated by establishing their price caps. In the natural gas sector, the following prices shall be regulated by setting the price caps of: 
1. transmission; 
2. liquefaction; 
3. storage;
4. distribution; 
5. guaranteed supply.

The National Control Commission for Prices and Energy shall set the price caps for a 5-year-term of regulation of natural gas prices. Prices may be adjusted by the Commission, but no more than once per year and in cases provided for by the Law on Natural Gas. The Law on Natural Gas stipulates that gas undertakings shall set their specific gas tariffs to household customers for a period of 6 months.

The structure of gas Tariffs for household customers

According to used gas amount household customers are divided into three groups, for which different tariffs are set:

  • Customers of the I group, who use gas for cooking and who consume up to 500 m3 of gas per year;
  • Customers of the II group, who use gas for heating and who consume from 500 m3  to 20 000 m3 of gas per year;
  • Customers of the III group, who consume more than 20 000 m3 of gas per year.

The gas price for household customers consists of two components. The fixed tariff component is paid monthly irrespective of the gas volume consumed. The variable tariff component is paid for the gas volume actually consumed. As UAB 'Lietuvos dujų tiekimas' supplies gas for the majority of the household customers in Lithuania, below is presented the structure of gas tariffs for household customers of this company.

 

The structure of the gas tariff for cubic meter

The gas tariff for cubic meter consists of imported gas price, the costs associated with gas delivery to the customer (transmission and distribution), funds required to ensure security and reliability, the set profit margin for supplier and taxes.

The gas tariff for cubic meter for the I, II and III groups differs in the distribution service component. Since the costs of gas delivery are similar, no matter if customer consumes up to 500 m3 of gas or much more, when dividing these costs from the amount of gas consumed (in cubic meters), lower distribution service component is calculated for the II and III group.

The difference between dynamics of actual gas import price and the import price which is included in the tariff for household customers is presented in fig. 1.

Fig 1. The dynamics of gas import price for the period of 2011–1st half of the year of 2017, as well as forecast for the 2nd half of year of 2017 and gas price included in the tariff for household customers, Eur/thousands m3

1-pic-gas.png

Source – NCC.

 

Since the 1st July of 2017 the variable tariff component for the I group of household customers increases by 5,86 percent, for the II group – by 9,38 percent, for the III group – by 9,99 percent, comparing with variable tariff component valid in the 1st half of year of 2017.

 

Fig 2. The structure of variable gas tariff component for cubic meter for the 2nd half of year of 2017, Eur/m³

 2-pic-gas.png
 
 Source – NCC.
 

The expenditures for gas delivery to the customer and security of supply component are being regulated. Components that are not regulated are gas import price, supply margin and value-added tax.

 

The structure of fixed gas tariff component

 

The fixed tariff component is paid monthly in order to keep working capacity of the system and to ensure reservation of power in the transmission pipelines, as each customer must have the guarantee to receive quality service at any time. The fixed tariff also includes expenditures for accounting and for conclusion of contracts (price of supply).

 

Fig 3. The structure of fixed gas tariff in 2017, Eur/month

 

grafikas-3-2017.png 

Source – NCC.

 

The price component set to ensure power in the transmission pipelines depends on power which is necessary for a certain customer group and on the number of customers in a certain group. The customers of the II and III groups need 6 times higher power than customers of the I group. The supply price for the customers of the I group is 0,42 Eur/m3, while the price for II and III groups is 1,358 Eur/m3. The difference between these prices is mostly due to the number of customers in a certain group.

The data about heating prices in European countries is published by the statistical office of the European Union 'Eurostat'. Based on 'Eurostat' data, gas tariff in Lithuania on average was 0,0341 Eur/kWh in the 1st half of year of 2016 (excluding taxes).

 

Fig 4. The comparison of gas tariffs for customers, who use gas for heating in European countries,
the 2nd half of year of 2016, Eur/kWh

 4-pic-gas.png
 

Source – Eurostat.

 

Fig. 5. The comparison of gas tariffs for customers of the I group in Baltic countries, Eur/m3 including VAT

 5-pic-gas.png
 

*The price is calculated for a household customer consuming 72 m³ gas per year on average.
Source – Commission, http://www.lg.lv/, http://www.gaas.ee/

 

Fig. 6. The comparison of gas tariffs for customers of the II group in Baltic countries, Eur/m3 including VAT

6-pic-gas.png 
 

*The price is calculated or a household customer using 2000 m³ gas per year on average.
Source – Commission, http://www.lg.lv/, http://www.gaas.ee/

 

Natural gas tariffs for household customers as well as transmission and distribution prices of the main gas companies from the 1st January 2017 are presented below.

UAB „Lietuvos dujų tiekimas“

AB „Energijos skirstymo operatorius“

AB „Amber Grid“