Gas company gets tough with non-payers

  • 2009-08-26
  • From wire reports
RIGA - Beginning this month, natural gas distribution company Latvijas Gaze will be cutting off the gas supply for those not paying the bills, and who have not made arrangements on repayment of their debt, reports news agency LETA. Total debt owed by private households is now at 4.6 million lats (6.5 million euros), with the number of late payers exceeding 113,000.

"The company has no choice but to disconnect the debtors, because their debts may increase even faster once the heating season starts, which in turn may create problems for the company to settle its payments to gas suppliers," says company press secretary Vinsents Makaris.
The gas company has offered its problem payers to schedule their debt repayment, though repayment schedules won't be changed once the heating season starts.

In 2009 and 2010, gas consumption volumes in Latvia are expected to drop by 30 percent, compared to 2008, to about 1.4 billion cubic meters, predicts company board chairman Adrians Davis in a radio interview on Latvian State Radio. Davis says that gas consumption in Europe will also decrease by 30 percent on average.

He also believes that a rapid increase in gas prices, over the next several years, "is not likely. Consumption of oil and gas has decreased due to the economic crisis, and it is only natural that the supplier has to lower the price. If [gas prices] increase in a year, the increase will be 5, 10 or 15 percent, not more," he says.
Davis says that "Residents owe most of the debt; a large number of debtors are the owners of individual houses that consume gas for heating, both in Riga and Jurmala." He questions that "it is rather odd that these people could afford to buy a beautiful house, and they drive beautiful cars, yet they do not pay for gas."

The chairman notes that, being a large company, it "has to maintain a large organization, and must work with a profit, which should be about 10 percent of net turnover. Without a profit, companies such as Latvijas Gaze cannot exist." Latvijas Gaze in the first quarter of 2009 reported profits of 5.7 million lats, 18.8 percent higher than the same period for 2008.