Lithuanian Govt to Spend €570 million on Compensating Consumers for Energy Price Rise

The government of Lithuania has set aside an amount of €570 million to partially compensate its citizens for the sharp increase in gas and electricity prices.

Electricity lines in Lithuania. Credit: Lithuanian Energy Ministry website

The government of Lithuania has set aside an amount of €570 million to partially compensate its citizens for the sharp increase in gas and electricity prices.

The government of Lithuania has set aside specific amounts of partial compensation for electricity and natural gas prices, as well as the minimum threshold for the electricity price below which partial compensation for electricity shall not be applied. The amounts of partial compensation for electricity and natural gas prices will apply from July to December 2022.

The revised 2022 state budget provides for €973 million for anti-inflation measures, of which around €570 million should go to household customers, thus partially compensating them for the sharp increase in gas and electricity prices.

Part of this partial compensation is intended to compensate for the additional component to the price of the electricity transmission service and for the additional component to the price of the natural gas distribution service, which aims to compensate UAB “Ignitis” for the lost revenue due to the differences which were established in the previous periods between the forecast and the actual price of the gas and electricity product.

The approved electricity and natural gas prices and tariffs and the implementation of the partial compensation model will cover approximately €365 million of the related costs incurred by UAB “Ignitis” in the previous periods that were not included in household customers’ bills for the public supply of electricity and natural gas, and this will have a positive effect on the Group’s working capital and debt level.

Partial compensation for all private customers of public, independent supply and supply of last resort will be provided directly through their electricity supplier and natural gas supply company. State budget funds for partial compensation for private customers will be distributed by the administrator (AB Energijossk) in accordance with procedure. In turn, the administrator will be paid by the Ministry of Finance of the Republic of Lithuania using state budget funds.

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