France to end gas and electricity price freezes
France's finance minister has announced end dates for the freeze on domestic gas and electricity prices, which have been in place since 2021.
Finance minister Bruno Le Maire announced on Friday the end dates for the bouclier tarifaire (price shield) for domestic customers of gas and electricity, which has protected French households from the worst of the spiralling energy prices seen across Europe since the Russian invasion of Ukraine.
He told LCI radio that the price freeze for gas will end "this year", while the freeze on electricity prices will come to an end two years later, "at the start of 2025".
Gas prices were frozen in 2021, initially as an aid with the rising cost of living - in the spring of 2022 the freeze was extended and electricity prices were also frozen, in order to protect French households from the spiralling energy prices seen across Europe after Russian's invasion of Ukraine.
Domestic gas and electricity price rises were capped at four percent throughout 2022, and then allowed to rise by a maximum of 15 percent at the beginning of 2023.
Le Maire on Friday stated that prices will not rise immediately, but that the freeze on gas prices will end "this year" - although he did not give a precise date.
Electricity customers will enjoy frozen prices for a little longer, with their price shield being lifted "at the start of 2025".
He told LCI: "Now that prices have returned to pre-crisis levels at €50 per megawatt hour, the freeze will end this year. There is no reason to maintain this price shield.
"Natural gas prices have fallen significantly since the unprecedented peaks of 2022, caused by the war in Ukraine and the end of Russian gas exports to Western Europe.
"Electricity prices have not yet completely returned to normal. I give us two years to get out of this situation, by the beginning of 2025. The tariffs remain very high. EDF's production remains a little below what we can expect."
French state electricity giant EDF has been hit by maintenance problems in its nuclear reactions, which have forced halts on production in several plants.
Even before the price freezes were imposed, the French government was involved in price-setting for energy companies, and before the prize freeze a monthly rate was published which showed a percentage rise or fall in prices.
The government-set rate refers to the basic price plan from EDF. Some people are on special deals or time-limited tariffs, so if their deal or payment plan ends and they go back onto the basic rate, they can see a rise above the government rate.
EXPLAINED Why does France cap its energy prices?
The cap refers only to domestic customers - small businesses can benefit from a different price protection depending on the size of their company, although many family-owned businesses such as boulangeries have complained that they miss out on state aid, meaning that baguettes have become more expensive.
Le Maire added: "Growth is coming back and we expect inflation to fall. Now is the time to start restoring public accounts and accelerating debt reduction. Reducing the debt means freeing up room for manoeuvre for public policies."
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Finance minister Bruno Le Maire announced on Friday the end dates for the bouclier tarifaire (price shield) for domestic customers of gas and electricity, which has protected French households from the worst of the spiralling energy prices seen across Europe since the Russian invasion of Ukraine.
He told LCI radio that the price freeze for gas will end "this year", while the freeze on electricity prices will come to an end two years later, "at the start of 2025".
Gas prices were frozen in 2021, initially as an aid with the rising cost of living - in the spring of 2022 the freeze was extended and electricity prices were also frozen, in order to protect French households from the spiralling energy prices seen across Europe after Russian's invasion of Ukraine.
Domestic gas and electricity price rises were capped at four percent throughout 2022, and then allowed to rise by a maximum of 15 percent at the beginning of 2023.
Le Maire on Friday stated that prices will not rise immediately, but that the freeze on gas prices will end "this year" - although he did not give a precise date.
Electricity customers will enjoy frozen prices for a little longer, with their price shield being lifted "at the start of 2025".
He told LCI: "Now that prices have returned to pre-crisis levels at €50 per megawatt hour, the freeze will end this year. There is no reason to maintain this price shield.
"Natural gas prices have fallen significantly since the unprecedented peaks of 2022, caused by the war in Ukraine and the end of Russian gas exports to Western Europe.
"Electricity prices have not yet completely returned to normal. I give us two years to get out of this situation, by the beginning of 2025. The tariffs remain very high. EDF's production remains a little below what we can expect."
French state electricity giant EDF has been hit by maintenance problems in its nuclear reactions, which have forced halts on production in several plants.
Even before the price freezes were imposed, the French government was involved in price-setting for energy companies, and before the prize freeze a monthly rate was published which showed a percentage rise or fall in prices.
The government-set rate refers to the basic price plan from EDF. Some people are on special deals or time-limited tariffs, so if their deal or payment plan ends and they go back onto the basic rate, they can see a rise above the government rate.
EXPLAINED Why does France cap its energy prices?
The cap refers only to domestic customers - small businesses can benefit from a different price protection depending on the size of their company, although many family-owned businesses such as boulangeries have complained that they miss out on state aid, meaning that baguettes have become more expensive.
Le Maire added: "Growth is coming back and we expect inflation to fall. Now is the time to start restoring public accounts and accelerating debt reduction. Reducing the debt means freeing up room for manoeuvre for public policies."
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