Gas prices rise 2% in October

GAS prices will rise by 2% on October 1: the third rise this year but much less than supplier GDF Suez had wanted and much more than consumer associations wanted to pay.

The government refused the gas company's demand for a 7% rise and limited it to 2% "to protect French people's purchasing power".

Ecology and Energy Minister Delphine Batho had indicated last week that it was out of the question to accept the GDF Suez demand and the company has simply said it "took note" of the decision. No indication was given of what charge would apply to businesses.

The new government had been forced to increase prices by 2% in July following a 4.4% rise by the old government in January. Electricity prices also rose 2% in July.

However, the rises go beyond what Prime Minister Jean-Marc Ayrault promised after the election when he said annual rises would be limited to inflation - or about 2% a year.

Consumers' group CLCV said the rise was "totally unjustified" for an "essential" service and the "seven million households dependent on gas had seen prices rise 8.5% in 10 months".

GDF's rivals have also hit out at the restricted price rise, saying it was "below the real costs of providing gas supply" and their Anode umbrella group is thinking about an appeal to the Conseil d'Etat, France's highest administrative jurisdiction.

In an earlier ruling, the conseil said gas prices should be tied to the costs of production.

The government is intending to look at new rules for gas prices - and is also planning to change to a progressive gas and electricity tariff.

This new tariff would only come in after the completion of the extension of the "social" tariff for poorer households. This will rise from one million households to four million over the next year.