Gas supply: which contract to choose

A natural gas contract is an agreement between a supplier and a consumer for the allocation and supply of natural gas or liquefied gas (LPG). These contracts can be used for both domestic and industrial purposes and can be long term or short term. In this article we will analyze the types of natural gas contracts and the related conditions.

Types of natural gas contracts

Natural gas contracts can be split based on duration and flexibility . The types of gas contracts are as follows:

Short Term Contracts : These contracts have a maximum duration of 24 months . They are ideal for consumers who only need fuel for a short time, such as short-term rental apartments.

Long Term Contracts : These contracts last for more than two years . Typically, companies use these contracts to ensure a long-term, stable supply of natural gas.

Fixed Contracts : These contracts provide for the freezing of gas prices for a pre-established period of time, usually one or two years. This means that no matter how the market changes, the price won't change.

Variable contracts : these contracts stipulate that the price of natural gas changes according to market fluctuations .

Natural gas contractual terms

Gas contracts generally contain the following clauses:

Price : The gas price is one of the most important points of the contract. There are various ways of calculating the price: for example, the price can be based on the quantity of gas supplied per day, on the quantity of gas supplied in a month or on the trend of the energy market . Prices may also vary according to the time of day , day of the week or season .

Payment terms : Payment terms may vary from contract to contract. Some manufacturers require an upfront payment, while others allow for recurring payments.

Supply conditions : The duration of the supply contract may vary. It can last from a few weeks to several years. Typically, long-term contracts include automatic renewal clauses, but some require a renewal request.

Transportation : Transportation includes the cost of transporting natural gas from the reservoir to the production plant and then from the producer to the consumer.

Penalties : Penalties specified in the contract are important to ensure compliance with the terms. Manufacturers can charge consumers fines for late payments or service outages.

There are many options on the open market . It's not easy to navigate the plethora of over-the-top promotions. Therefore, finding a supplier who can supply the right gas for your needs can take time and effort. To protect consumers, prices and any promotions must be clear and detailed, including any changes over time or costs and guarantees at your expense. Other information that cannot be omitted before signing the contract are the methods for calculating consumption (period), the accepted payment methods and their timing, the conditions for withdrawal and reconsideration, any defaults and foreseeable circumstances, information and reports of complaint, and last but not least What matters are the rights that consumers have.

Knowing your consumption is important in order to be able to stipulate a gas contract that is suitable for your personal habits and that does not overwhelm the family budget.

Under the Enhanced Conservation Scheme, which is currently due to end on 10 January 2024, unless further postponed, the Industry Authority sets gas prices quarterly based on changes in raw material costs, transportation and handling costs . Electricity meter and system charges. In a free market, on the other hand, operators can offer customers more competitive prices and independently decide whether to offer discounts, promotions and exclusive offers. So in general, free market offerings are consistently good for consumers.

Credit Rating : Some manufacturers require customers to have a higher credit rating before they can trade with each other.

Insurance : Some gas contracts require consumers to purchase gas damage insurance.

In short

Natural gas contracts are an important tool for ensuring a stable supply of natural gas or LPG. The choice of natural gas contract depends on the individual needs of the consumer, the type of operation of the company or private individual, the trend of the energy market and costs. Before closing a deal, it is important to read the terms of the contract carefully and evaluate the long-term costs.