What rises are expected for gas bills in France in 2024?
We look at how a tax increase on suppliers in January and distribution rate rises in July are expected to affect households
Gas prices are decreasing this January yet some bills may still rise Credit: Mickael G / Shutterstock
Gas bills in France look set for two rises in 2024 due to increases in a tax paid by suppliers and gas distribution fees.
However, the exact impact on a household’s bill will depend on the kind of gas contract they have.
The first rise, effective from January 1, 2024, is due to an increase in a tax that gas suppliers must pay the government called taxe intérieure sur la consommation de gaz naturel (TICGN).
The rate of the tax has almost doubled, from €8.45 to €16.37 per megawatt-hour, which experts estimate will most impact households on ‘fixed-price’ contracts, resulting in an average increase of around €90-100 per year.
On average, households use between 11 and 12 megawatt hours per year, figures from energy regulator, the Commission pour la Régulation de l’Energie (CRE), show.
Households that are on ‘fixed’ gas prices will bear the brunt of the increase because the price of their gas is fixed but the portion of the bill linked to taxes is not.
Those on Engie’s ‘passerelle’ contracts (a ‘bridging’ arrangement for those on the old ‘regulated’ tariffs that ended in summer last year), or on other firms’ contracts indexed to this, may not feel the impact of the tax increase straight away.
This is because prices on the markets are slightly dropping, as is the ‘reference price’ set by the CRE to be used as a guideline for the fees charged to those on the passerelle deal.
The prix de référence is decreasing by 3% this month compared to December 2023 so bills in this case may automatically be lower before the increase comes into play.
The former ‘regulated’ gas price was frozen in November 2021 to help households cope better with rising prices on the world markets.
The freeze lasted until the end of 2022 and during 2023 a price ‘shield’ scheme continued, limiting overall rises to around 15% for those on regulated or the new passerelle tariffs or contracts indexed to it. This protection is being progressively lifted this year.
In June 2023, as the regulated tariff ended, 2.31 million households were on a regulated tariff and 8.2 million households were on contacts with other companies.
You can use this official government tool to compare gas and electricity deals that may be relevant to you here.
Second increase in July 2024
A second increase in gas prices is expected in France from July 2024 onwards.
Households that use gas for heating can expect their bill to increase by 6.3% and households using it for hot water and cooking gas bill by 11.3%, the CRE estimates.
This is because GRDF, France’s main gas distributor, is increasing the distribution fee it charges to suppliers by 30%. For several years, this fee has remained stable and has not risen with inflation.
The GRDF is owned by French energy group Engie. It asked for an increase of 41% but the CRE only allowed an increase to 30%. This rate will later increase along with the rate of inflation for the next three years.
How does France compare to other countries?
In the UK, energy bills are expected to increase by 5% in January due to Ofgem, the UK’s energy regulator, increasing its price cap.
In the US, gas bills for the 2023-2024 winter period are expected to be lower than for the 2022-2023 winter period, due to lower gas prices, states the US Energy Information Administration.
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