The issue ignited the legislative campaign: starting Monday, the average gas bill for millions of French citizens will rise by 11.7%, primarily due to the revaluation of gas network maintenance costs.
Political Timing of the Increase
The increase has been announced for months, but its implementation clashes with the political calendar, just days before the conclusion of a decisive legislative election largely focused on purchasing power.
After a respite of several months, the average annual gas bill will climb by 124 euros, rising from 1,060 euros in June to 1,184 euros on July 1st.
“Reference Price” Increase
According to the Energy Regulatory Commission (CRE), the sector’s watchdog, the average “reference price” per kWh, which had been trending downward in recent months, will settle at around 13 cents for July, an 11.7% increase compared to the June index (around 11 cts/kWh).
The CRE emphasizes that this July price remains lower (-3.5%) than that of January, which marked the end of the tariff shield, the subsidy mechanism launched in late 2021 to protect households from excessive increases during the energy crisis fueled by the post-Covid recovery and the war in Ukraine.
Furthermore, this “reference price” is “indicative,” and suppliers are “free” to pass it on or not, the CRE points out. Consumers can compare prices using the online tool provided by the Energy Ombudsman.
Impact on Consumers
According to the Ombudsman, however, “the vast majority of consumers will see this increase reflected in their bills,” meaning most of the 10 million residential customers connected to GRDF.
Reasons Behind the Increase
This increase is due to a rebound effect in gas prices on the markets where operators source their supplies, and, above all, due to the significant four-year revaluation of gas transportation costs borne by the distribution network operator GRDF.
This “toll,” billed to suppliers and accounting for a third of the bill, must be increased to cover the rising expenses of maintaining and modernizing gas infrastructure, while also allowing for the integration of green gas into the pipelines.
This is especially important as it becomes more difficult to distribute these costs with the declining number of gas subscribers: -197,000 between the end of 2022 and the end of 2023, according to the CRE.
Political Reactions
The independent authority, CRE, had announced the gas bill increase as early as February, before specifying the details on June 10th, the day after the European elections and the dissolution of the National Assembly. This sparked heated debates.
The National Rally (RN) warned that its first reform, if it were to come to power, would be to cancel this increase, a measure also advocated by the New Popular Front.
Government Response
“The increase in gas prices is proof positive that it is essential to accelerate our energy transition,” commented Economy and Finance Minister Bruno Le Maire on Monday, as a guest on France Inter.
This increase is “proof that the climate skepticism of the National Rally, its refusal to move towards green energies, its inability to defend the electric vehicle (…) leaves us bound hand and foot with gas and oil-producing countries,” added Mr. Le Maire.