There are less than six months left until the regulated gas tariff in France ends, on July 1, and the deadline worries consumer associations who fear a commercial rat race in a very unfavorable disturbed period.
Historically, the opening of European energy markets to competition, initiated by the United Kingdom in 1984, was aimed at ceasing to depend on a national public monopoly and promoting competition. It worked until prices became very high and volatile.
How does the regulated rate work?
The regulated gas tariff dates from April 1946, at the end of World War II.
Set by the government, it depends on the cost of purchasing gas in wholesale markets, storage and transportation costs, and taxes. It could vary every month until the government froze it on October 1, 2021. But on January 1, the government increased it by 15%.
Why does it disappear?
The extinction of the regulated gas tariff has its origin in a decision of the State Council of 2017, which considered it contrary to European law.
As of January 1, 2016, most condominiums (consuming more than 150 megawatt hours per year) must already subscribe to a market offer, as well as individuals who moved on or after November 20, 2019.
Market offers have long been cheaper than the regulated rate. According to the Energy Regulation Commission (CRE), 60% of residential consumers have already switched to a market offer, compared to 26% that were still in the regulated rate as of March 30, 2022 and the 14% on the same indexed rate.
Why the concern?
The CLCV consumer defense association considers it “very risky to ask 2.6 million households to choose an offer in such a toxic market.” “Let’s go back two years, Europe allows it!” His general delegate, François Carlier, begged this Tuesday when publishing a letter addressed to Emmanuel Macron.
According to the association, what is happening in the condominiums or HLM is a harbinger of future difficulties.
Far from being able to put competition into play, condominiums, whose contract expired in recent months, face a shortage of offers, and even at high prices. They do have a tariff shield, but it only absorbs part of the price increase, and aid arrives with a random delay.
What does the law say next?
The Energy Regulatory Commission could publish this famous reference tariff around March-April. Everything indicates that it will no longer return to the level of yesteryear.
For Rexcode’s Raphaël Trotignon, “the price of gas will be permanently higher than in the past, so it is not logical to keep people in the illusion that the price of gas is still low. On the other hand, it should not be exposed to too violent variations and it may be justified to soften the rise over time”, especially “because we know that we are going to need three years to reorganize the European gas supply without Russia”.
Source: BFM TV
