Energy

France increases gas tariffs but promises no further hikes before April 2022

The price of natural gas has rocketed worldwide this year but the French government plans to freeze price hikes
The price of natural gas has rocketed worldwide this year but the French government plans to freeze price hikes Eric PIERMONT AFP/File

The price of gas in France goes up by 12.6 percent on Friday, but Prime Minister Jean Castex says the government will ease the cost of rising prices for consumers by blocking further natural gas price hikes.

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"For natural gas and electricity, we'll put in place what I would call a tariffs shield. We're going to shield ourselves against those tariff hikes," Castex told TF1 television on Thursday evening.

On Monday, France's energy regulator said that Engie's gas prices would increase by 12.6 percent on 1 October. This translates as a 5 percent pre-tax price rise for households using gas for cooking and more than 14 percent for households with gas central heating.

Castex said the 12.6 percent increase would go through, but that prices from then on would remain at the same level "until world prices go down" which should be around the month of April.

The price of gas already increased by 7.9 percent in September and reflects a global rise in gas prices due to a number of factors including low storage levels and reduced Russian supplies.

Prime Minister Castex also promised to shield households from global increases on electricity tariffs.

The price hike, due in February 2022, will be "limited to 4 percent," he said.

French consumers have been less impacted by soaring electricity prices than other EU countries because around three quarters of the nation’s power comes from nuclear plants.

But despite the nuclear-rich energy mix, consumers have still felt the effect of global price hikes because part of France's electricity is indexed to the wider European market.

Election fever

French Finance Minister Bruno Le Maire said earlier this week he expected rising energy prices to last for a "few more months".

With presidential elections just seven months away, the French government is aware of the risk of cash-strapped consumers facing higher heating bills.

The struggle to make ends meet was a key concern during the 18-month long 'Yellow Vests' protest movement in 2018/2019.

Two weeks ago the government said it would make a one-off payment of 100 euros to the 5.8 million households that receive energy vouchers to help ease the cost of rising energy bills.

Castex said the government would be willing to consider taking further action if the measures currently planned weren't enough to ease the burden for the less well-off.

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