The Lithuanian capital, which mostly relies on gas for heating, is looking at a 60-percent rise in heating bills this winter.
Vilnius turned on central heating in schools and hospitals this week. Centrally-heated residential buildings may follow suit shortly, if cold weather persists, according to the city's authorities.
Central heating in Lithuania is turned on when average temperatures drop below 10 degrees three days in a row.
Soaring energy prices in global markets mean that Lithuanian households will have to pay more for heat. The biggest rise is expected in Vilnius, where, according to the city's authorities, heating bills could soar by as much as 60 percent. The State Energy Regulation Service expects a 50-percent rise.
“We are dependent on gas prices which are breaking records in global markets,” says Vice Mayor Valdas Benkunskas.
Other cities and towns, which use more biofuel in their energy mix, will see more moderate rises. In Kaunas, heating bills could increase 5 percent; 16-percent rise is expected in Klaipėda, 14 percent in Panevėžys and 30 percent in Šiauliai.
“Prices of all energy resources have been growing fast, be it heat, natural gas, electricity,” says Rimas Valungevičius, head of the State Energy Regulation Service. “This will be a significant year for consumer bills.”
Industry is also feeling the squeeze, though. Lithuania's fertilizer manufacturer Achema, which is one of the biggest single gas consumers in the country, has announced it is cutting ammonia production in half.
According to analysts, there are two main reasons for the record-high energy prices. First, businesses that cut activities during the pandemic are picking up pace again, pushing up demand for energy.
The second reason is that Russia's state-owned energy behemoth Gazprom has cut gas supply to Europe.
According to Lithuanian observers, Russia is thus trying to promote the use of its newly-expanded Nord Stream pipeline.
“Russia's actions to limit gas supply to Europe [are aimed at] forcing European countries, Germany and the European Commission to speed up permits for Nord Stream,” says Lithuania's Energy Minister Dainius Kreivys.
“It is [Moscow's] way of saying: we can supply all you need via Nord Stream 1 or Nord Stream 2 and if Europe doesn't want that, we can stop gas altogether,” says analyst and former energy minister Arvydas Sekmokas.