RIGA - During the upcoming heating season, the Latvian state will compensate half of the energy price increase for households, the government decided on Tuesday upon reviewing the Welfare Ministry's report.
According to the Economics Ministry's estimates, prices on electricity, natural gas, thermal power and solid fuel together are likely to rise by 39 percent in 2022, which would push up the overall consumer price level by 3.8 percentage points, while fuel prices are expected to surge 40 percent this year, lifting inflation by 2.7 percentage points.
Welfare Ministry spokeswoman Aiga Ozolina told LETA that for those households that heat their homes with electric power, the state will compensate 50 percent of the electricity price exceeding EUR 0.160 per kilowatt hour but no more than EUR 0.100 per kilowatt hour. Households will have to pay the full price for the first 500 kilowatt hours but will be compensated for the energy consumed above that threshold.
The price of natural gas for households is being projected at around EUR 140 per megawatt hour next heating season. The size of compensations for gas consumers would be calculated based on the difference between the upcoming heating season's price and the last heating season's price of EUR 68 per megawatt hour. The approximate price difference would be EUR 70 per megawatt hour, of which the state would cover 50 percent.
For households connected to centralized heating systems, the state would also compensate 50 percent of the difference between the coming season's heating rate and the last season's median heating rate of EUR 68 per megawatt hour. For instance, if the heating rate next season reaches EUR 198 per megawatt hour, the compensation would be EUR 65.
The Economics Ministry has also proposed to put a cap on the wood pellet price at EUR 300 per ton, which would be close to the last season's median heating rate and average at EUR 70 per megawatt hour.
The state would also cover 50 percent of the rise in the wood pellet price if it surged past EUR 300 per ton, but no more than EUR 100 per ton.