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Residents of the capital anxiously await the news on how more the district heat may rise this winter. The company VILNIAUS ENERGIJA, managed by the French investors, applied to the municipality of the capital and the National Control Commission for Prices and Energy (NCCPE) with a request to raise the heat price in Vilnius from February even by 51.1 %.

 

Following the calculations of heat suppliers, Vilnius residents should plank down even 34.09 cents per kilowatt-hour. In several other towns of the country heat price to consumers will reach even 28-35 cents per kilowatt-hour.

 

Pursuant to the data of NCCPE, to the majority of heat production and distribution companies, which use natural gas as fuel, rates, recalculated last autumn, demonstrated an average climb up to 31 cents per kilowatt-hour.

 

Heat suppliers are impelled to increase prices because of rapid rise in the price of gas and accumulated losses. Now this burden is passed over on the shoulders of consumers.

 

 

Heat price to Kaunas residents should not result in any rise. Despite the fact that last year the gas price increased by more than 50 %, heat price to Kaunas residents will remain at the rate of 24.29 cents per kilowatt-hour. This season Kaunas Heat and Power Plant (KHPP) will continue the production of heat at the rate of 14.76 cents per kilowatt-hour. Such heat production and distribution rates have been established since                 1 December 2008 and will remain in force for half a year.

 

According to Antanas Pranculis, the Director General of the KHPP, Kaunas residents may stay calm for this heating season as heating prices will not increase definitely.

 

“Following the valid laws, our company will be entitled to recalculation of the heat price after half a year. Should the current tendencies in the global fuel market persist and the price of natural gas remain lower than the one given in the estimates of the heat price, price of the heat produced by KHPP will plunge”, said Mr Pranculis.

 

In his opinion, the company purchased natural gas from Russia on favourable conditions and thus avoided huge losses. Therefore, it is plausible that the heat price in Kaunas city is likely to remain much lower than that in other Lithuanian towns.

 

KHPP is one of the cheapest heat producers in the country. Price for heat production in Vilnius, including fuel expenditure, has topped over 20 cents per kilowatt-hour.

 

 

Possibilities for any reduction in the future heat price for residents will depend both from the gas prices and KAUNO ENERGIJA, which supplies heat to the residents of the city.

 

Nevertheless, Kaunas inhabitants should not raise any expectations for noticeably lower bills for heating. Provision of cheaper heat to the residents may be precluded by the decisions of the government, as the Conservative-led Government reached the decision to eliminate the reduced VAT rate on heat of 5 % from September of this year. Adoption of this has been already effected under the law. Thus, during the coming heating season the district heating services will be subject not to a 5 %, but a 19 % VAT rate.

 

Increase in VAT will add up to the leaky state budget, but the simple inhabitants will pay a heavy price for that.

 

 

Following the information in the Russian Business daily Vedomosti in the middle of December of last year, estimates of the gas concern GAZPROM demonstrate that, after the plunge in the oil price, gas to Europe may get cheaper even by 30 % in 2009. Natural gas is the major fuel for heat production.

 

It is forecasted that GAZPROM sales in Europe, which make up the principal income of the given concern, may evidence the fall by 30-40 % because of the reduction in industrial production and the weather getting warmer, thus, the gas demand is likely to decline too.

 

GAZPROM is the sole gas supplier to Lithuania. Russian concern is one of the shareholders of LIETUVOS DUJOS and the owner of KHPP.

 

KHPP is planning the construction of a new thermal power plant with the capacity of several hundred megawatts, which would become one of the most modern plants in the eastern and central Europe.

 

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