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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure LV-2022-1/2416 – measures in Latvia

Subsidies for citizens to reduce the rise in energy prices

Energoresursu cenu ārkārtēja pieauguma samazinājuma pasākumi iedzīvotājiem

Country Latvia , applies nationwide
Time period Temporary, 01 January 2022 – 30 April 2022
Context COVID-19
Type Legislations or other statutory regulations
Category Promoting the economic, labour market and social recovery
– N/A
Author Kriss Karnitis (EPC) and Eurofound
Measure added 24 May 2022 (updated 20 June 2022)

Background information

On 29 January 2022, the Law on Measures to Reduce the Extraordinary Rise in Energy Prices entered into force. It provides for four months, from 1 January 2022 to 30 April 2022, to provide various types of support measures to legal and natural persons to partially offset rising energy costs.

Content of measure

From 1 January to 30 April 2022, the electricity transmission system service fee and the mandatory procurement component (OIK) fee will be fully compensated from the state budget to all end-users.

The state will cover the difference up to the tariff approved by the Public Utilities Commission (PUC) (€68 per MWh) for heat supply customers - households with an extreme price increase. The law also provides for support measures for certain groups of the population:

  • For families, there is a support of €50 per month for each child, including a child under the age of 24 who is still studying.
  • A benefit of €20 per month from 1 January to 1 April 2022 will be granted to seniors.

Use of measure

The electricity transmission system service fee and the mandatory procurement component (OIK) fee compensation could cover around 860,000 electricity end-users. Full compensation to system operators over a four-month period will provisionally cost the state €63.5 million, while covering OIK costs €21.2 million.

The reduction of the heat supply service fee could be applied to approximately 78,500 households, according to the annotation of the draft law. The total amount of aid for the four-month period is €7 million.

The estimated number of beneficiaries for support of €50 per month for each child is 397,936, with a total disbursement of around €80 million. 553,000 people will receive senior support, which will cost a total of about €44 million.

Target groups

Workers Businesses Citizens
Does not apply to workers Does not apply to businesses Applies to all citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Informed Informed
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • Social partners jointly
  • Main level of involvement: Peak or cross-sectoral level

Involvement

No specific involvement to report.

Views and reactions

No specific views to report.

Sources

  • 29 January 2022: Law on Measures to Reduce the Extraordinary Rise in Energy Prices (likumi.lv)
  • 29 January 2022: Regulation on support measures to compensate for rising energy prices enters into force (lvportals.lv)

Citation

Eurofound (2022), Subsidies for citizens to reduce the rise in energy prices, measure LV-2022-1/2416 (measures in Latvia), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/LV-2022-1_2416.html

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