Why is it important? The end of regulated gas tariffs in July: why it is scary

“We ask for the end of the regulated tariff to be postponed in order to avoid the storm,” the consumer association CLCV wrote in a letter to Emmanuel Macron, requesting the cancellation of the regulated gas sales tariff for individuals planned for June 30.

Historically, the opening of European energy markets to competition, initiated by the United Kingdom in 1984, was aimed at promoting competition and discontinuing dependence on national public monopolies. It worked until the prices were too high and volatile.

What should we fear from this announced end? What will be the consequences? We take part.

How does an adjustable rate work?

The regulated gas tariff dates back to April 1946, the end of World War II. It is determined by the government, which depends on the purchase price of gas in the wholesale markets, storage and transportation costs and taxes. It can change every month until the government freezes it on October 1, 2021. But on January 1, the government increased it by 15%.

Why should he disappear?

The cancellation of the regulated gas tariff follows the decision of the State Council in 2017, which it considers contrary to European legislation. From January 1, 2016, the majority of condominiums (consuming more than 150 megawatt hours per year) must already subscribe to the market offer, as well as those who moved from November 20, 2019.

Market offers are cheaper than the long-established tariff. According to the Commission for Energy Regulation (CRE), on 30 March 2022, 60% of household consumers have already switched to a market offer, compared to 26% still on a regulated tariff and 14% on the same indexed tariff.

Why such concern?

The CLCV, which has long campaigned on the issue, considers it “too risky to ask 2.6 million families to choose an offer in such a toxic market.” “Let’s go back two years, Europe allows it!” On Tuesday, his chief representative, François Carlier, pleaded, publishing a letter addressed to Emmanuel Macron.

There will be a big cheat fair, there will be a break in the fall

“It will be a great deception fair, there will be breakdowns in the fall,” said Francois Carlier, predicting a brutal awakening of state authorities who “like bakers” will “have to hold another summit.” set a security tariff”.

Condominiums are already a concern

According to CLCV, what happens in condominiums or HLMs is a harbinger of trouble to come. Condominiums whose leases expired in recent months are far from being competitive, facing a dearth of supply and still high prices. They have a rate shield, but it only absorbs part of the price increase, and relief comes with an occasional delay.

“Rather than measures that divide the French, are difficult to read and leave people indecisive, why not take a simple, unique and fair measure: restore the regulated tariff? “, asked the rebel deputy Benedicte Taurine in the Assembly on Tuesday.

“What you are proposing is an energy shield and exorbitant costs for all economic players,” Industry Minister Roland Lescure replied.

What does the law say next?

Antoine Autier, head of research at UFC-Que Choisir, fears: “The risk is that consumers will be drowned in confusing commercial messages, because there is a market to be bought in the short term.” He advocates the creation of an “automatic reference rate that allows comparison of offers.”

The Energy Regulatory Commission may publish this popular reference tariff around March-April. Everything indicates that it will not return to the previous level.

According to Rexecode’s Raphaël Trotignon, “gas prices will forever be higher than they have been in the past, so it doesn’t make sense to keep people under the illusion that gas prices will stay low. On the other hand, they should not undergo too drastic changes and it may be appropriate to soften the rise over time, especially “we know that we need three years to reorganize the supply of European gas without Russia”.

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