Free gas market
Market is open, what next?
The opening of the market does not mean an automatic reduction or increase of the price. Prices of natural gas fluctuate irrespective of whether the market is open or remains regulated. In the regulated market, too, the price of natural gas was pegged to the price of oil products and natural gas on exchanges and it changed depending on client consumption — for some each month, for others once every half year. At the moment, prices of oil products and natural gas are higher than they were in 2016, which pushes up the natural gas price.
The price of natural gas is pegged to the mazut (with sulphur content of up to 1%), diesel (with sulphur content of up to 0.1 %) price/quotation index FOB ARA (Free On Board Amsterdam, Rotterdam, Antwerp) in oil product exchanges and to gas prices in European natural gas exchanges, as well as to the ratio of euro to US dollar as defined by the European Bank. As the price quotations of mazut, diesel, gas and currency exchange ratios change.
We are the only company that offers a completely transparent price formation for natural gas; we will be informing about changes in the natural gas procurement price on our portal on the 1st of each month for the following month; our mark-ups are fixed and non-variable, and information is available to everyone. And there are no other standing charges, costs of administration or services referred to otherwise. Balancing will be performed by our partner, by filling in a table on our portal as regards the necessary natural gas amount for the following day.
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Other related articles from the media
Dienas Bizness, 3 April 2017
The newspaper Dienas Bizness writes that along with opening the gas market, no rapid changes are expected in the nearest future in the range of products or supply conditions.
Unlike the opening of the electricity market, at the time of opening the gas market, companies from all three Baltic States (15 in total) have come forth as traders, all having substantial experience in the field of energy and considerable budgets. The Ministry of Economics believes that one of the possible reasons why the natural gas market has attracted a relatively high interest of undertakings from all Baltic States is the fact that the natural gas market in Latvia is larger than the electricity market. When re-calculated into energy units, the annual natural gas consumption in Latvia amounts to about 14 TWh of energy, while in the electricity market, it is approximately 7.2 TWh. Worth noting here is that the energy expert Reinis Āboltiņš, on the programme “Krustpunktā” on the Latvian radio 1, shared information that by 2030 the natural gas consumption in Latvia will decrease by 50 % in comparison with early 2015 — this according to estimates by analysts of “Latvijas gāze”, which are influenced by various objective factors.
At the same time, in the region, there are already considerably more natural gas market players with certain experience in the open gas market, for example, in Lithuania and Estonia. Possibly, the fact that the natural gas prices up to now have already been pegged to global market factors, such as oil product prices and currency fluctuations, and have regularly undergone fluctuations, plays a certain role. Therefore, natural gas users are already rather prepared for work in conditions that are expected in a free natural gas market.
“At the moment, all gas traders are at relatively similar starting positions, because, in the Baltic States, there are no natural gas extraction companies and all will be determined by the strategy that the trader has opted for to buy natural gas on the wholesale market. The situation on the electricity market was opposite, where, in the early stages, the only market players were the local energy producers,” explains Jānis Bethers, the Chairman of the Board of Enefit.