Latvian government generally in favour of energy resource price reduction

So far no one in the ruling coalition in Latvia has voiced any objections against reduction of VAT rate for electrical energy and natural gas. However, it is necessary to reach an agreement on specific solutions, said Minister of Economics Jānis Vitenbergs in an interview to Latvijas Radio on 13 December.
The minister said one of the issues that requires the government to reach an agreement on is the term for VAT reduction, because everyone is in agreement that the reduction should be limited in term. However, opinions about the length of the term differ.
The politician estimates that the ministry’s proposed solution would help reduce electricity bills by more than 40% for residents.
According to Vitenbergs, the issue of energy resource prices is one of the primary ones for the government to work on, because heating and electricity compose the main costs for households in Latvia. If an agreement on this issue is reached on 13 December, the government may discuss it the day after.
Vitenbergs said other decisions in regards to support for residents are possible, such as increase of support for protected electricity consumers.
Minister of Welfare Gatis Eglītis told LTV he plans to suggest providing support using housing benefit solutions, proposing for the state to take on half of the costs associated with this benefit and for the other half to remain in the hands of municipalities.
This division of costs would be limited to the winter season.
As previously reported, on 13 December the ruling coalition in Latvia will discuss proposals for benefits to compensate the growth of prices of energy resources, as reported by the ministry.
The Ministry of Economics reveals that among the proposals is the reduction of VAT rate for electricity and natural gas from 21% to 5%, as well as reducing electricity transmission tariffs.
AS Latvijas Gāze has reported that depending on consumption volumes natural gas tariffs for households may increase in the range between 54.2% and 93% next year.
AS Augstsprieguma tīkls, meanwhile, reports that current electricity market outlooks suggest the average electrical energy price in Latvia’s trade region have already reached a historical maximum – 125.39 EUR/MWh.