Natural gas prices almost exceeded the €115-per-MWh mark on the Title Transfer Facility (TTF) market in October, and, while the assumption at the time was that prices had peaked – after that point the price fell to €90 per MWh – since then, the level has crept up again and now stands at over €140 per MWh, another new record, AK reported.

Margus Kaasik, board member at Eesti Gaas, which supplies virtually all Estonia's gas needs, told AK that: "We had hoped that [October] would be the peak and at some point in November prices would be moving down with a pretty good momentum. Everything seemed to be fine and in order, but unfortunately since then, this upward trend has returned."

This means that optimism in October that spring gas prices may be at the €40-per-MWh level, has since evaporated.

At the same time, forecasting was difficult, Kaasik went on.

He said: "It is still very, very difficult to predict anything reasonable. At the moment, it seems to me that this thing may not get better here in the coming weeks. On the contrary, in fact."

Marko Allikson, management board member at independent energy traders Baltic Energy Partners, told AK that spring's natural gas prices might be over double the earlier estimate.

"Futures prices there have also risen significantly since the second quarter for next year; whereas they were somewhere between €45-50 [per MWh] a few weeks ago, now it is at over €80, so that rise has been noticeable."

Predictions of a cold winter – something which has already so far materialized in Estonia since late November, barring a brief mild spell in mid-December – and scarce supply are behind the high prices, AK reported.

 Around 61 percent of trading inventories are fulfilled as of now, Allikson told AK, compared with 79 percent this time last year. At the same time, traders were likely to buy gas at any price against a long winter, so this price would be passed on to consumers also.

Other factors include the greater popularity of home-owned natural-gas fuled hot water boilers, compared with centrally-controlled district heating.

The former have become much more commonplace in the past 20 years as Estonia grew more prosperous, but owners will now be hit by the high natural gas prices.

While district heating – hot water which is usually the by-product of power stations' activities and which is piped in to apartment blocks to make up the bulk of their heating – has also seen a rise in price, recent government support measures will also apply to this bill category.

In some instances, however, even larger apartment blocks have switched to their own in-house boilers.

In one example, a large Soviet-era apartment block on Tammsaare tee in Tallinn, which has a boiler of its own, has seen a four-fold increase in heating prices, to €126 per month per apartment, on average, AK reported, while the disparity between it and the earlier district heating bill payments is even greater.

The government announced Monday that it would be shelving the network connection fee for natural gas at least through to March, to alleviate high bills. This will cost the state over €24 million, as it has to subsidize suppliers for the lost income. A similar policy was implemented with electricity bills in October, where the network fee has been halved. The cost of electricity, too, has recently seen all-time record values.

The government also on Monday set the energy support monthly household take-home threshold wage at €1,125, meaning households below that level will be eligible for energy bill payment support of up to 80 percent on all three bill types – electricity, gas and district heating. This has to be applied for, and will be handled by the local municipality.

The TTF is a virtual trading point for natural gas in the Netherlands. 

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