Despite falling oil prices, consumers unlikely to see lower heating bills soon

(PM/Scanpix)
12/3/2014 1:59 PM
Category: Economy

While dropping oil prices are causing wealth to shift and financial planners to re-run calculations, most Estonians are unlikely to see relief this winter in their heating bills.

Most Estonian district heating systems were transitioned to wood chips and fuels like peat in the last decade, and so there will not be an immediate effect. (Drivers have a little bit more spending money already, though, as a liter of 95 octane gasoline has dropped to 1.17 euros, about 10 percent under summer prices.)

Fortum Estonia exec Margo Külaots said their heat company, which provides service to residents in Tartu and Pärnu, does have some boiler units that run on petroleum products, but most run on less volatile domestic peat and wood chips.

But Külaots says customers will eventually see some relief as transport prices are oil-dependent and are a component in all fuel prices one way or another.

More to the point, the boilers used in peak periods run on natural gas, which tends to echo oil prices.

A nine-month trough in the oil price would show up as lower heating bills, said Andres Taukar, a member of the Heat and Power Association board.

Taukar also said that boilers that were once configured for gas and now use wood still have the option of reverting to gas, and added that the companies themselves as well as market regulators will certainly back the use of whichever is cheaper.


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