Natural gas price formation

Jaa:

The price of natural gas consists of the energy charge and the transmission charge in the same way as the price of electricity. The reasonableness of natural gas pricing is supervised by the Energy Authority, which also determines the permitted rate of return for natural gas transmission.

The natural gas energy charge is index-linked to the price of crude oil and international coal as well as to a domestic energy price index published by Statistics Finland. The price of natural gas is reviewed on a monthly basis, whereby it maintains its relative position against other forms of energy.

Natural gas transmission pricing is based on the capital tied up in the transmission network as well as the costs arising from transmission network operation. Transmission charges are also affected by delivery point-specific consumption.
The steadier the rate of consumption, the lower the gas price. Steady consumption has an impact on transmission as well as energy charges.

How is the natural gas wholesale price formed?

Wholesale customers’ gas procurement is based on supply and connection agreements and annual orders that supplement these, in which the customer determines the annual maximum capacity for gas transmission as well as the amount and capacity of gas required per month.