The Energy Regulatory Commission (CRE) this week published a “favorable opinion” on the government’s plan to increase gas prices every month, at least until February 2021. The fall started ten years ago eight months, in January 2019, is over. Over this period, regulated gas prices fell 25.9%. The increase should however remain measured initially: it is expected at + 6% over the entire period (eight months), from 1is August to 1is next February. But it covers the months when the French need the gas the most, especially for those who heat themselves with this energy.
Today, 40% of households still benefit from regulated gas prices – the only ones affected by the measure: the others have a contract offer, which defines their price (fixed, variable, indexed, for a year or two in general). The regulated tariff must disappear completely in 2023, in favor of a competitive offer.
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Smoothing
At 1is July, a final fall of 0.3% will be followed by a first increase of 0.2% in August. Then, a small increase will punctuate the months, until stabilization in February 2021. So far, the collapse of the price of gas on the international markets has benefited French consumers, even though the last two winters have proven to be quite mild in the northern hemisphere. World production, in parallel, has exploded. Falling demand, rising supply: prices have fallen. The Covid-19 health crisis has increased the excess production – and stocks. The good deal lasted a few months.
But CRE is now anticipating a price reversal from autumn 2020, catching up with prices. For its part, the government has chosen to extend the price “smoothing” mechanism, put in place after the yellow vests crisis. Objective: avoid excessively sharp declines and increases. Without this device, prices would have fallen by more than 5% next month, while consumption is low. But they would have exploded in the fall (+ 3% in October, 6% in November), and in the winter, in full consumption peak. With the smoothing, the monthly increase will not exceed 1.7% in November or December, months of strong demand.
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