GAS PRICE. The price of gas literally exploded this Monday, March 7, with a jump of more than 60% compared to its initial price. The megawatt hour has just exceeded 340 euros. What consequences in France? What measures has the government taken? We tell you everything.
[Mis à jour le 7 mars 2021 à 18h24] The escalation of gas prices continues at the start of the week, the benchmark European gas price, the Dutch TTF, is experiencing a new worrying record on Monday March 7, 340 euros the megawatt hour. A staggering price that worries more and more Europe, a major importer of Russian gas. If we can talk regarding a songwhat for France is to be very little dependent on Russian gas with “only” 17% of our gas imports. We are much less dependent than some of our neighbors like Germany, for example. When we import 17% of Russian gas, our Germanic friends import 55 at 60% their gas from the country of the tsars. Then, the French government does not intend to let go of its citizens.
Indeed, Bruno Le Maire wishes to activate the lever of the tariff shield and even plans to go further, quite the contrary as he hammered on BFM TV, Monday March 7 : “All options are on the table, we are working on it. It will be a painful impact for Russia, and the impact will also be real for the French economy.“. The Minister of the Economy also called on the French to pay more attention to their consumption, proof that all efforts, even on a small scale, will contribute to limiting the damage.
Recall that the tariff shield should be extended until the end of year 2022. Already in place until June 30, the device aimed at freezing gas prices in France for individuals might exceptionally be extended so that the rise in gas prices does not spread to France this year, and support the power of purchase by the poorest households. Excluded from the tariff shield until then, companies might also be affected by the announcement of the Minister of the Economy. Would be eligible, companies whose gas consumption is substantial and vital to the proper functioning of the activity. These companies should also demonstrate tough international competition. The decisions are on the table and the verdict should be in soon.
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 might 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 price of natural gas in Europe is already soaring to reach 213 euros per megawatt hour. 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 might be spared, there should not be a shortage either in France.
What regarding companies that are not protected by the price shield? The latter might bear the brunt of the effects of the war in Ukraine. Adverse effects that would immediately impact their competitiveness.
Presented as the European reference price for gas, the Dutch TTF has experienced a real explosion since the beginning of this week, around 213 euros per megawatt hour on Friday March 4, 2022. Since this Monday, contracts have soared by 50%. A bad omen before a potential rise in gas prices in France.
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.
Good news for households that still depend today on regulated gas prices? In addition to the creation of an inflation allowance instead of a fuel check, the Prime Minister announced that the tariff shield used to freeze gas prices will be extended until the end of 2022, instead of April.
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 next 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.
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 provider, 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 below: