Gas price: why will the regulated tariff soar by 10% as of July 1?



The bill is likely to increase for millions of households. The regulated gas tariff has experienced a third consecutive month of increase in France, with a further increase of 9.96% excluding taxes on July 1. Between the global economic recovery and the new French ecological objectives, specialists in the sector envisage a sustainable increase in gas prices.

“This price increase was expected, it was even inevitable”, recalls Raphaël Boroumand, professor of economics and energy specialist at the Paris School of Business. Among the factors explaining this development, “the recovery of economic activity in China weighs for a lot”, he analyzes, “with the restart of energy-intensive industries such as stationery and the automobile”.

The state of natural gas stocks in Europe is another factor. A continent that has suffered “a rather long winter, and high household consumption due to teleworking”, list Patrice Geoffron, professor of economics at Paris-Dauphine University. Result: the gas reserves of the Old Continent are close to 40% below average. Otherwise, “Stock filling was slow in the spring because of temperatures below normal for the season”, he adds.

This prolonged demand is a boon for gas exporters like Russia (from which more than a third of the gas consumed in Europe comes), which has been trying for several months to push prices up by limiting its exports. The gas market has also suffered “major maintenance operations in Norway, which accounts for 18% of European imports”, details Raphaël Boroumand.

“When we look at the economic indicators and the tension on the supply, everything suggests a prolonged rise in gas prices”, warns Raphaël Boroumand, who evokes a final cause of inflation: the increase in the price of a tonne of CO2, a device supposed to support the ecological transition. “This increase in Europe will encourage the replacement of coal by gas [moins taxé], to produce electricity“, explains Patrice Geoffron.

In France, the increase in gas prices is also partly linked to the increased cost of energy saving certificates (EEC), which oblige gas or electricity suppliers to finance green measures. New energy sobriety goals “which account for a fifth of the increase in France”, considers Patrice Geoffron.

If the prices are brought to rise in the short term, the experts nevertheless call to put the increase in perspective by observing the evolution over the long term. Because the global industrial recovery is currently correcting gas prices, which have been falling almost constantly since the start of the coronavirus pandemic. Finally, gas prices in France have only increased by 1.1% since January 1, 2019, as the Energy Regulatory Commission (CRE) pointed out in a press release. “Reading over a few quarters can give rise to spectacular movements”, alert Patrice Geoffron, who points out that current prices have returned to the same level as in 2015.

“We can relativize over the last few years, but what interests consumers, Those are the rates to come “, note Raphaël Boroumand, who points “a problem of budget forecast” for the few 3.2 million customers a regulated rate contract in France. Gas remains an important expense item for the French, recalls the association UFC-Que Choisir, which estimates the average annual bill for a household heated by gas at 1,200 euros, i.e. “more than a month’s salary for many French people”.



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