The gas market in France: what you need to know

2023-08-17 12:21:05

Gas market: total opening up to competition

Since July 1, 2007, the gas market in France has been completely open to competition. This means that all end consumers can choose their natural gas supplier. They have the choice between varied tariffs, at a fixed price or linked to the wholesale market, freely offered by all suppliers, whether incumbent or alternative.

The opening up to competition has led to a significant increase in market offers. In 2017, these offers represented 88% of the volume of consumption and concerned more than 56% of the sites. Alternative providers gained ground, capturing 26% of the residential market and 41% of the non-residential market.

French gas market players

There are approximately 190 authorized suppliers in France and 22 local distribution companies (ELD). Among these ELDs, one can find, for example, Gaz de Bordeaux, the sole supplier to the Bordeaux conurbation. Because if the market is indeed open to competition, Bordeaux gas remains the only company to provide its services to these inhabitants. But, for all that, its clientele comes from all over France since it can offer its offers anywhere in the country. And this is also the case for other suppliers and ELDs.

All suppliers have public service obligations, particularly in terms of continuity of delivery. The diversity of players and increased competition have led to lower prices, with discounts of up to 10% compared to average prices.

Composition of prices and regulation

Gas prices for small consumers are made up of several elements: 41% by supply costs, 27% by infrastructure costs and 22% by taxes and contributions. Suppliers import gas mainly by pipeline from Norway and the Netherlands, but also in liquefied form from Algeria, Egypt or Qatar.

The tariffs are set according to the gas purchase costs, the costs of using the infrastructure and the supplier’s marketing costs.. They change automatically at infra-annual periods, depending on changes in the wholesale market, in particular the Amsterdam market, which is the benchmark for natural gas in Europe.

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