After the natural gas market is fully opened to household users, competition will remain minimal in the coming years and only one or two new traders could appear, predicts Gunārs Valdmanis, executive director of the Association of Electric Power Engineers and Energy Builders.
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The natural gas market in Latvia was opened in 2017, but in order to ensure its gradual opening, in recent years, household users have had the option of continuing to receive natural gas as a connected user from the public trader AS “Latvijas gāze” at a natural gas tariff approved by the Public Services Regulatory Commission (PURC). or to purchase natural gas at the market or unregulated price from any merchant registered in the register of natural gas traders, who ensures the sale of natural gas to household users.
Valdmanis explains that with the full opening of the market on May 1 this year, the number of traders who will be ready to supply natural gas to households could increase.
“Until now, the regulated price set a peculiar ceiling, and this is not beneficial for traders who work in conditions of free competition. The regulated price provides that the trader has the right to certain financial guarantees from the state if the price is too low. Therefore, in general, excluding individual traders, traders were not are interested in actively participating in the market, because they did not have access to such advantages as “Latvijas gāzei”, says Valdmanis.
He does not predict a large increase in the number of natural gas traders, and says that one or two more traders could appear in this segment in the coming years.
“The household sales segment is not quite easy for a trader. It is advantageous for those who already have large databases, a large number of customers,” explains Valdmanis, adding that the entry of smaller traders is not predicted, as it is not economically justified without a ready infrastructure.
It has already been reported that the natural gas market for households will be fully opened on May 1, and the public trader offering the service at a regulated price will no longer exist.
Until now, the only merchant that offers to buy natural gas for household users at the market price is JSC “Latvenergo” with the trade name “Elektrum”. On the other hand, “Elenger”, a subsidiary of Estonian “Eesti gas”, will also start offering the service from May.