Although at first glance it might seem like you are only paying for the kilowatt-hours (kWh) or cubic meters (m3) consumed, the final amount is actually made up of several important items. A natural gas bill consists of four main components:
1. Natural Gas Price (Supply)
This is the charge for the actual energy resource you have consumed in your home or business. This portion is determined by Ignitis based on the current market situation and your specific usage type (e.g., heating or cooking). This is the variable part of the bill—the less natural gas you consume, the lower this cost will be.
2. Transmission and Distribution System Services (Infrastructure)
To ensure natural gas safely and continuously reaches your gas stove or heating boiler, a complex network of pipelines must be maintained. These services are provided by the distribution and transmission system operators (Gaso and Conexus), while the tariffs are approved by the state regulator (SPRK - Public Utilities Commission).
This component typically consists of two parts:
- Fixed fee: A charge for maintaining the connection and network capacity. This must be paid every month, regardless of whether you actually consume any gas.
- Variable fee: A charge for the physical transportation and delivery of natural gas to your property, which fluctuates based on your actual consumption.
3. Excise Tax
A state-mandated tax applied to the use of natural gas. The tax rate varies depending on what the natural gas is used for. For example, natural gas used for residential heating is subject to a lower rate than gas used for space cooling or industrial technological processes.
4. Value Added Tax (VAT)
The final component which, in accordance with the legislation of the Republic of Latvia, is applied to all of the above-mentioned items (the gas price, system services, and excise tax). The standard VAT rate for natural gas supply in Latvia is 21%.