The French Ministry for an Ecological and Solidary Transition (Ministère de la Transition écologique et solidaire) has announced a 7.5% increase in regulated gas tariffs starting from 1 July 2018. This is the largest increase over the last 6 years, with tariffs returning to their 2015 level, and will result in a €90/year increase on the average household bill.
Several reasons can explain this price increase, in particular the rise of natural gas supply costs: gas is purchased partly on wholesale markets, whose prices vary according to geopolitical contingencies and market fluctuations. The formula used for calculating these costs depends on oil prices, which have soared in the recent months. Moreover, the French gas infrastructure (particularly in transport, storage and distribution) has been experiencing significant investments in recent years. In particular, the French gas transmission network GRTgaz invested €600m/year over the last 10 years to modernise its network. The installation of the Gazpar gas metering system, implemented by the distribution company GRDF, is also included in these costs.
This increase will affect more than 5 million French households supplied by Engie and 22 local gas distribution companies, while another 6 million have switched to alternative suppliers and liberalised tariffs (usually indexed on regulated tariffs). Regulated tariffs should be progressively removed through the end of 2022.