Protect the French… and the popularity of the executive. It was the mission of Jean Castex Thursday evening, on the set of TF1. Faced with soaring energy prices, the Prime Minister announced the establishment of a “tariff shield”. “There will be no more increase in the price of gas” from November, he promised. It has indeed jumped 57% since the start of the year, and will increase by another 12.6% this month. Without government action, the bill could have swelled even more: “We are expected to have a 30% increase by the end of the year” assured the Prime Minister.
For electricity, it is the increase planned for February 2022 that will be partially halted. While the government was considering a 12% jump, Jean Castex assured that bills would only increase by 4% next year. “For a French person heating with electricity, this increase will materialize on his bill to the tune of 5 euros per month”, specifies Matignon.
Staggered and smoothed rise
In order to deploy its famous “shield”, the executive has a weapon of choice: regulated tariffs for electricity and gas. To modify them, nothing could be simpler, it is enough for him to publish an order in Official newspaper. Regarding gas, 5 million households will see their bills frozen… temporarily.
The executive keeps in mind the previous attempts to freeze tariffs under François Hollande and Nicolas Sarkozy. Each time, the blockages decided upon had been the subject of legal recourse, and consumers had found themselves with catch-up bills. This time around, there will be no surprises. Thursday evening, Jean Castex hastened to say that the increase avoided in winter would be gradually offset from the spring of 2022: “from April (…), we will pass on today’s increase”. “The smoothing of gas prices [pourra] spread for up to 18 months ”, specifies Matignon to 20 minutes.
A threat to alternative suppliers?
While consumers are therefore temporarily protected against increases, this is not the case with alternative suppliers, some of which are indexed to regulated prices. With the announced freeze, they will therefore have to pay a very high price for their electricity for a few months without being able to compensate for the additional cost.
“The cash flow of alternative suppliers will not be able to absorb” this drop in revenue, reacts to AFP Naïma Idir, president of the Anode association, which includes TotalEnergies, Vattenfall, Enercoop … “Cash advances in question here are of an order of magnitude that is quite manageable for distributors ”retorts Matignon, always with 20 minutes.
Associations want a reduction in VAT
For customers, the rise in the bill should therefore occur… after the presidential election, the first round of which is scheduled for April 10. It didn’t take much for the opposition to see it as a political maneuver. “Macron blocks this increase until the presidential election so that it does not show” indignant Luc Carvounas (PS), while Marine Le Pen speaks of “electoral measures”.
On the side of consumer associations, the measure chosen by the government does not raise overwhelming enthusiasm either. “Overall, consumers will not derive any benefit from a price freeze” note the UFC Que-Choose. For the CLCV association, “a reduction in VAT would be a simple and effective additional measure”. Currently, VAT on gas consumption is set at 20%. In Spain, the government chose this summer to lower this tax,
which was not enough to stop the explosion of bills.