Linas Jegelevičius for the BNN
Amid spiking energy prices Vilnius residents had been expecting higher heating bills this winter, but the reality check they had this week knocked many off feet – literally. Instead of expected 50-60 percent higher heating bills, they came 100-140 percent bulkier than a year ago.
«All knew that heating bills will go up, but the reality is much harsher, indeed» Arvydas Sekmokas, Energy minister in Conservatives (TS -LKD) lead Cabinet during 2009-2012, told BNN.
Yet the stories of Vilnius residents approached by BNN startle.
Jolita and her 17-year-old son live in a 70-square-metre apartment in an unrenovated building in Vilnius. The mother will have to pay 220 euros for December’s heating – a staggering 120 percent leap over just one year.
«This is crazy. I feel dizzy – so shocked I am. I will have to spend 25 percent of my salary on heating alone», she said.
Linas has a tiny 22 square meter newly refurbished studio in a tsar-era building on the outskirts of the capital’s old city. For heating last winter, he used to pay approximately 35-40 euros monthly. 2020 December’s heating bill stunned him – 82 euros.
«I even called the utility, Vilnius šilumos tinklai, believing it made a mistake. But alas, it appeared to be jaw-dropping truth», he told BNN.
Vilnius dwellers living in newer houses have also received higher heating bills either. For example, Andrius, who lives in an 80-square-metre house built in 2006, will have to pay 200 euros for December’s heating.
Across the capital city, heating bills in December were between two and two-and-a-half times higher than in 2020, according to Laurynas Jakubauskas, head of the Customer Service Department at Vilnius Heating Networks (Vilniaus Šilumos Tinklai).
People living in a 50-square-metre apartment in an unrenovated house on average paid 123 euros for heating in December 2021, compared to 47 euros in 2020, he said.
«December 2021 was much colder. The average monthly temperature was 3.7 degrees below zero, compared to 0.2 degrees below zero in December 2020. The demand for heating energy in Vilnius increased by around 15 percent», he said.
«The other reason is the increase in gas and biofuel prices, which had an impact on the cost of production», Jokubauskas added.
Vilnius residents are compelled to pay more for heating than people in other major Lithuanian cities because the capital uses more gas to produce heat.
Yet the Lithuanian capital, which was looking at a 60-percent rise in heating bills this winter, was caught off guard by the immense leap in utility bills.
Especially that the State Energy Regulation Service, the country’s energy authority, was expecting a 50-percent rise.
«We are dependent on gas prices which are breaking records in global markets», Vilnius deputy mayor Valdas Benkunskas said in November.
But the reality check appeared harsher.
«The price prognosis was obviously not accurate», Sekmokas says.
Other cities and towns, which use more biofuel in their energy mix, were expected to see more moderate rises, but the prognosis crashed and burnt there too – December’s heating bills soared on average 50-80 percent up.
Industry is also feeling the energy price squeeze, too.
Read also: Lithuania saw EU’s strongest industrial growth in November
For example, Lithuania’s fertiliser manufacturer Achema, which is one of the biggest single gas consumers in the Baltics, was forced to cut ammonia production in half due to exorbitant gas and electricity prices.
Analysts claim robust industry growth, coupled with Gazprom’s scarcer gas supply to Europe are to be blamed for the rise.
In other words, businesses that cut activities during the pandemic are picking up pace again, pushing up demand for energy.
As for Russia, Lithuanian observers say it is trying thus to promote the use of its newly-expanded Nord Stream pipeline.
«Russia’s actions to limit gas supply to Europe are aimed at forcing European countries, Germany and the European Commission to speed up permits for Nord Stream», Lithuania’s Energy minister Dainius Kreivys has said.
Amid an expected surge in heating and electricity costs, the Lithuanian government has moved to cap the prices for consumers, spreading out the increase over five years.
«To contain the price shock, we will cut off the peak of the price hike and spread it over the next five years. We believe that this peak is temporary», Energy minister Dainius Kreivys said.
The government has also proposed to push back the deadline by six months for a second group of consumers to choose their independent electricity supplier.
The price of electricity for around 80 percent of all consumers who have not yet chosen an independent supplier went up roughly 20-25 percent from January.
Meanwhile, Seimas, the Lithuanian parliament, passed new legislation enabling more people to apply for heating subsidies.
Currently, 95,000 Lithuanians can apply for subsidies to cover part of their heating costs, with 14 million euros in budget funds allocated for the purpose annually.
But Sekmokas says that the measures are not enough.
«Poland has done more in mitigating energy price rise for its citizens. For example, the country has slashed VAT for food and excise tax for energy producers», he accentuated.
Enquired if immense heating bills could potentially trigger social unrest, the former minister was candid: «I really would not like to be part of this Cabinet…I’d brace for high energy prices for five years at least».
BNN ANALYSES | «Insane» heating bills startle Vilnius residents
