One of the taxes paid by natural gas suppliers will almost double on 1er January 2024, concretizing the exit from the tariff shield announced by the government, according to a decree published on Saturday December 30 in Official newspaper. The normal excise rate on natural gas for fuel use, which has replaced the internal consumption tax on natural gas since 2022, will increase to 16.37 euros per megawatt hour (MWh) from 1er January, compared to 8.45 euros currently, according to the decree.
This price corresponds to the ceiling authorized by the 2024 finance law, published the same day in Official newspaper. The Minister of the Economy, Bruno Le Maire, said on September 14 that this tax increase would be “without impact on the consumer”.
By comparison, the reference price for natural gas on the European market was around 32 euros/MWh on Friday December 29, after having well exceeded 100 euros in 2022, with peaks of more than 300 euros.
Bercy hopes for savings of 1.9 billion euros
“For half of gas subscribers who have opted for a fixed price tariff offer, the increase in excise duty will lead to an increase in the gas bill of around 8 euros per megawatt hour”, explains to Agence France-Presse Nicolas Goldberg, analyst specializing in energy at Colombus Consulting. Since individual bills are often presented in kilowatt hours (kWh), this equates to an increase of 0.8 cents per kWh. Many current fixed offers are offered by suppliers at a little more than 0.100 euros including tax, or 10 cents, per kWh.
The other half of subscribers signed offers based on an index, called a “sales benchmark”, established every month by the energy regulation commission. At the Ministry of the Economy, it is estimated that this index could fall, going from 123 euros/MWh in December for consumption linked to cooking or hot water in the low range, to an average of 114 euros over the first three month of the year, according to market expectations to date.
The consumer would therefore not benefit from the drop in prices, since the tax would cause the gas bill to remain around the price paid in December. The current price is at the same level as that of the exit from the tariff shield, on 1er July 2023. The increase in excise duty should generate 1.9 billion euros in savings for the State.
The gas distribution tariff will increase in summer 2024
For several months, the executive has been organizing the gradual exit from the tariff shield, deployed since the end of 2021 to moderate the impact on consumers of the surge in gas and electricity prices. Since 1er July, there are no longer regulated gas sales tariffs (TRVG), which allowed the government to directly limit price increases. Instead, a “benchmark” price from the Energy Regulatory Commission, updated every month, must serve as a guide, based on market prices.
Another increase for gas is also looming, this time with a consequence on the price paid by subscribers: the gas distribution rate, which accounts for around a quarter of the final bill, will increase on 1er July 2024; the Energy Regulatory Commission must determine by how much by early January.
Concerning electricity, no new tax increase has been published in Official newspaper. The government must raise the regulated tariff in February but has committed to ensuring that the increase is less than 10% compared to the August 2023 level.