GAS PRICE. The Minister of the Economy Bruno Le Maire plans to adapt the amount of the gas bill according to the level of income of the French. The goal? Fight inflation and rising energy prices.
[Mis à jour le 11 juillet 2022 à 14h39] Adapt the gas bill according to everyone’s payslip? This is one of the possibilities chosen by the Minister of the Economy Bruno the Mayor to try to fight against the rise in inflation and in particular the surge in energy prices. Guest on the set of LCI this Sunday, July 10, 2022, the tenant of Bercy discussed the future of gas prices, after the expiry of the December 31, 2022i.e. the end of tariff shield aimed at freezing energy prices: “We are starting to target those who need it the most. I think it will be necessary from January 1st 2023on theelectricity and the gas, that more help is given to those who need it. To do that, there have to be raises, for those who can afford those raises.” In other words, the government is considering taking into account the income level of each, by making the “richer” salaries pay more, and by reducing the bill for low-income households. For the time being, no details have yet been given regarding the exact amounts.
Last Thursday, June 23, Prime Minister Elisabeth Borne announced that the tariff shield on gas prices would be extended “until the end of the yearduring a press briefing at a national gas command center in Ile-de-France. The re-elected government had already blocked gas prices by 4% to avoid a spike in energy prices estimated at 44 5% and set by the Energy Regulatory Commission (CRE).The State will continue its strategy and settle the difference with market prices.France will also launch the construction of a new floating LNG terminal “to increase our ability to supply ourselves with gas that is not dependent on Russia“explained Elisabeth Borne. This supply also has the advantage of being supplied by boat, which is a real alternative to gas from Russia transported by pipeline. An LNG terminal managed by TotalEnergies which should be in working order by 2023. The French state also wants to fill its gas stocks to 100% before this fall.
The Prime Minister John Castex had already announced that the tariff shield used to freeze gas prices would be extended until the end of 2022, a device confirmed by the Minister of the Economy Bruno Le Maire but which must be officially put in place via the “resilience plan” expected mid-March. Already recorded until June 30, the French will therefore be protected beyond this date.
To justify this decision, Jean Castex explained that the decline in prices will be slower than expected. The tenant of Matignon has however ruled out, for the time being, any measure leading to a reduction in taxation. But concretely, what does this measure mean for consumers? Gas prices will, of course, be frozen until the end of the year. On the other hand, from the beginning of 2023, the price of gas will cost consumers a little more than market prices, so that the sums paid in addition during the winter by the operators are recovered. Since the beginning of the year, the regulated price has jumped by more than 50% since January. There was urgency as the mercury prepares to descend.
Thursday, June 23, Elisabeth Borne officially announced that the tariff shield on gas prices will be extended until the end of 2022.
The price of natural gas in Europe is soaring. The TTF rating, the Dutch reference in Europe, even reached an all-time high, 345 euros per megawatt hour, Tuesday, March 8, 2022. It has since fallen but remains well above the usual standards. This is the first visible consequence of the war in Ukraine. So, is there a real risk of rising prices in France? For now, not really thanks to the introduction of the tariff shield by the executive. Purchases of energy products could be spared, there should not be a shortage either in France.
However, the latest media releases from the government are not very reassuring. “We’re all gonna have to make an effort, we’re entering a new worlde” affirmed the Minister of the Economy, Bruno the Mayor beginning of March 2022. Paying attention to his energy consumption in the future is the wish of the Bercy tenant. Lower the temperature by 1 degree at home? This is one of the possibilities mentioned by Bruno Le Maire who calls on the French to make an effort. The International Energy Agency points out that a drop of one degree represents 7% savings per year.
Also, supply could be a problem in the future. Not this winter, no, but this summer! The filling of storage which takes place in the spring for the summer could not be carried out correctly if Vladimir Putin were to turn off the gas tap, or if Europe decided to stop importing Russian gas. Another double-edged decision, as with the exclusion of Russian banks from Swift.
The exclusion of Russia from the Swift banking transaction processing system also cast serious doubt on the supply and prices of raw materials and gas in France and Europe. In all likelihood, this will not be the case for gas prices in France. Indeed, purchases of energy products may not be impacted. Significant example, the subsidiary of the Societe Generale, Rosbankwhich officially escapes the exclusion of Swift by European countries, it is not part of the 7 Russian banks already banned. Excellent news for France and Europe in the face of the risk involved.
Today, 40% of European gas is imported from Russia. Be careful, however, only 17% of French gas comes from Russia, there is the big difference with ultra-dependent countries like Germany. Across the Rhine, our neighbors are dependent from 55% to 60% towards the Russia in terms of gas imports. Also, the pipeline North Stream 2 has just been completed between Russia and Germany. German Chancellor Olaf Scholz has already suspended the authorization for this gas pipeline. Germany finds itself trapped, and could be in great difficulty in the event of a cold snap.
If Russia decides to no longer supply France with gas, France will still have the possibility of supplying itself with Norway (36% gas imported into France) or Algeria (8% gas imported into France), France’s other gas trading partners. Please note that these countries have much more limited supply capacities than Russia. This import of liquefied gas from Norway and Algeria remains, today, the most serious and interesting track if Russia were to stop supplying Europe.
In France, there is no reason to worry, for the time being. Firstly, with Italy, France is the best European student in terms of gas storage according to The Parisian. This greatly protects us, initially, from the risk of lack of supply and variations in supply. Secondly, France has three LNG terminals: Montoir-de-Bretagne (Loire-Atlantique), Fos-sur-Mer (Bouches-du-Rhône) and Dunkirk (North). A considerable advantage which should make it possible to supply French customers with peace of mind in the coming weeks.
Remember that in France, suppliers are required to store gas for several months, in layers. And that’s good news, the French tablecloths are almost full. This covers 1/4 of the annual consumption. The difficulty will be to restock them at the end of winter. Otherwise, major difficulties are to be expected for next winter.
The consumer is facing a veritable spike in gas prices in recent months. For households using gas as a means of cooking, but also for heating, the successive increases will seriously affect the end-of-year budget. The Energy Regulatory Commission (CRE) has indeed announced a mess of increases in recent months, these increases affecting the regulated gas prices charged by Engie. They act indirectly on market prices. We summarize what has happened in recent months:
- +10% in July 2021
- +5% in August 2021
- +8.7% in September 2021
- +12.6% in October 2021
- +15% announced on November 1, 2021.
The government recently announced the payment of an additional energy check of 100 euros for the 5.8 million households benefiting from the energy check. Payment is scheduled for December. To find out more, see our dedicated article:
Are you still dependent on regulated gas prices? This price increase is not the only reason to look elsewhere! Since the Energy and Climate law adopted in 2019, regulated tariffs are gradually disappearing. Engie has ceased to market new contracts at regulated sales tariffs (TRV), since November 2019, which means that you will soon change your contract. If you have an Engie contract, don’t panic. It remains valid until June 30, 2023. In this context of crisis, are you studying the possibility of changing your energy supplier more seriously? Consult our dedicated file without further delay:
Be careful, however, since if you have not changed your contract yourself, you will see your contract automatically switch to a market offer from Engie, from July 1, 2023. If you change supplier, find out on the website of the national energy ombudsman, herewhich offers a comparator of offers to find the formula that meets your consumption needs.
Do you want to know the price of gas near you? Here are some examples: gas prices in Paris, Marseille, Lyon, Rennes, Nantes, or even Lille. You can also search for the city of your choice using the search bar above.