GAS PRICE. The explosion in gas prices due to the war in Ukraine might considerably disrupt European habits. Faced with the risk of a surge in the bill in France, will the tariff shield be extended by the Government? Response elements.
[Mis à jour le 10 mars 2021 à 12h27] At a time when the price of European gas is breaking records, the French government is brandishing the tariff shield to help households. 345 euros the megawatt hour tuesday march 8, a historic record for what is the benchmark in this field, the Dutch TTF. In this context of extreme tension, the Minister Delegate for Public Accounts, Olivier Dussopt spoke on this subject at the microphone of South Radiostill on March 8: “We will definitely extend the tariff shield“. Enough to endorse this measure, and offer real protection to the French on their next gas bill. Already in place until June 30, 2022the tariff shield aimed at freezing gas prices will therefore be extended until December 31, 2022. In addition to individuals, certain companies would be eligible for this price shield. In particular those subject to strong international competition, and those whose massive consumption of gas is vital to their proper functioning.
Remember that we are not dependent on Russian gas as theGermany. Indeed, our neighbors across the Rhine import up to 60% of gas from the country of the tsars. In France, “only” 17% imported gas comes from Russia. With spring pointing its nose, gas consumption should be lower, at least for heating in the months to come. The uncertainty is more on the side of stocks and their supply for next fall and winter.
The Prime Minister Jean Castex announced that the tariff shield used to freeze gas prices will be extended until the end of 2022. Already in place until June 30, the French will therefore be protected beyond this date.
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. 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 price of natural gas in Europe is already soaring to reach 345 euros per megawatt hour, Tuesday, March 8, 2022. 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.
However, the latest media releases from the government are not very reassuring. “We’re all gonna have to make an effort, we’re entering a new worlde” affirmed the Minister of the Economy, Bruno the Mayor at the beginning of the week. Paying attention to its energy consumption in the future is the wish of the Bercy tenant. Lower the temperature by 1 degree at home? This is one of the possibilities mentioned by Bruno Le Maire.
Also, supply might be a problem in the future. Not this winter, no, but this summer! The filling of storage which takes place in the spring for the summer might not be carried out correctly if Vladimir Putin were to turn off the gas tap, or if Europe decided to stop importing Russian gas. Another double-edged decision, as with the exclusion of Russian banks from Swift.
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.
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 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 supplier, find out on the site 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:
