The price of natural gas for households that have concluded a market contract with one of the suppliers will be several times higher from October 1, according to some estimates even up to six times higher than the current one, which is why some suppliers, such as Rijeka’s Energo, are already preparing notices for customers in which they will be offered the possibility of changing suppliers or switching to gas supply under the obligation of public service, i.e. at a regulated price.
Citizens could find some kind of salvation from the enormous price increase in terminating the contract with the suppliers and switching to gas from the public service obligation, the price of which is fixed until April 1 next year, but even in that case they will pay at least twenty to thirty, in some cases up to 65 percent more expensive, at least in the Rijeka area. It is questionable whether gas prices from the Public Service Obligation will survive without huge state interventions.
If the price of gas on the reference European stock exchanges continues to rise, and even if it remains at the current levels of around 235 euros per megawatt hour, it is quite certain that the suppliers will not be able to extend the contracts with the users, which mostly expire on September 30, at the current prices , but at a price that would be at least four times higher. As the suppliers themselves estimate that customers will not be able to pay such a price, they will inform customers in detail about the possibility of changing suppliers or switching to the delivery of gas in the so-called public service obligation, in which prices are fixed until April 1 next year.
The possibility of choice
We remind you that customers can choose between entering into a commercial contract with one of the suppliers, whereby they individually agree on the gas price, and for those who did not do so, the state ensured the delivery of gas as a public service obligation, through a supplier selected in a public tender for each distribution area separately , writes Novi list.
Customers who have market contracts concluded with Energa, which holds the vast majority of consumption in the Rijeka area, currently pay for natural gas, depending on the tariff model, even up to 65 percent lower than the price of natural gas of HRK 0.4383 per kWh (including VAT -om), under the obligation of public service, which is supplied in the Rijeka area by the Zagreb Gas Refinery. These are customers who also use natural gas for room heating, and who signed market contracts precisely because of the lower price. Soon, however, the vast majority of them could switch back to public service obligations.
When asked by Novi list, Energo confirms that it will soon send notifications to its customers, with whom they have concluded contracts, about the new price calculation and the options available to them to change suppliers.
“The new gas prices, starting from October 1, 2022, will depend on the movement of the gas price on the stock exchange. Given that the price will change on a monthly basis, we cannot say exactly how much the increase will be. Precisely for this reason and the impossibility of giving a precise price, the notification will contain a detailed explanation of the new method of calculating the price from the reference market, all with the aim of enabling all customers to understand the new calculation method and decide whose gas supply service they want to receive in the future. It should be noted that this form of calculation will be adopted by the majority of suppliers from October 1, 2022. Energo will transparently explain the situation to customers. For example, in the case of a customer of the household category, for whom the state provides cheaper gas through public service obligation supply, we will clearly explain to the customer the difference in the price of Energo’s market supply and the stated public service obligation supply”, Energa replied.
Too many unknowns
Household customers’ contracts with suppliers expire on September 30 of this year, after which they can request a change of supplier or simply not sign a contract with any of them and switch to supply through a public service obligation. Namely, due to the increase in gas prices, all end customers from the household category have the right to a unilateral early termination of the gas supply contract without paying a fee or any other costs, as well as to a free procedure of changing the supplier.
The editors of Novi List were also interested in whether the expected five- to six-fold increase in the price of gas will affect the same increase in the price of thermal energy from the city’s heating plants managed by Energo, which would effectively mean the collapse of the heating system in Rijeka.
“When we talk about the price of gas, we cannot talk about an increase of five or six times, because the price will be linked to the stock market and we do not know how much it will be. What we can say is that all energy entities that deal with the supply of thermal energy, including Energo, are in constant contact with the work team from the relevant Ministry through the Croatian Chamber of Commerce. So far, two meetings have been held in the relevant ministry, in April and July, with regular changes of relevant data, and intensive work is being done to define the optimal solution both for energy entities and for end customers of thermal energy, all in the context of a more favorable supply of energy for the upcoming heating season. At this moment, we cannot talk about concrete numbers”, answered Energo.
Pricing
At what price will the heating companies purchase gas, not only in Rijeka, but also in other distribution areas, i.e. will they be able to purchase gas at the price from the public service obligation for the categories of citizens, given that they deliver thermal energy mainly to citizens, they asked Ministry of the Economy.
“Heat energy suppliers have raised the issue of the increase in heat energy prices through the HGK’s Heat Activity Group. It is not only the purchase price of gas that is at issue, but also the fact that certain suppliers have not contracted the quantities necessary for the production of thermal energy. “We are working on a solution in accordance with the rules on state aid, which would make it possible that the price of heat energy per kWh for the end customer does not differ from that paid by the end customers of gas in a particular distribution area,” the Ministry replied.
Necessary state intervention
Gas supply under a public service obligation (PSO) in the largest number of distribution areas in Croatia is carried out by the City Gas Company of Zagreb. With the current gas prices, and even higher prices announced for this fall, it is completely clear that this company will hardly be able to deliver gas at the prescribed prices from the public service obligation, which are already four times higher than the price from OJU on the stock exchanges. and, at the same time, survive on the market.
The only way to maintain the price from OJU until April 1 next year is a serious intervention by the state through some form of subsidy or the assumption of responsibility by a state company, specifically HEP. What will happen will most likely be known in the next few weeks.
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