PARIS, July 18 (Reuters) - The French government has decided to raise regulated household electricity prices by 10% starting from August, a government official said on Tuesday, confirming a report from newspaper Les Echos.
The government official added that this will be the only price hike until February 2024.
The 10% increase is much lower than the one proposed by the French Energy Regulatory Commission (CRE), which - based on current market prices - recommended an increase of 74.5%.
āWe are in a phase of returning to normal, or in any case of returning to a new balance after the energy crisis that we experienced, even if obviously energy prices remain high,ā said the government source, emphasizing that the French would continue to benefit from some of the lowest prices in Europe.
In May, Finance Minister Bruno Le Maire said Franceās cap on electricity prices would be phased out and end at the end of next year.
The 10% increase is much lower than the one proposed by the French Energy Regulatory Commission (CRE), which - based on current market prices - recommended an increase of 74.5%.
So the current regulated price and the price after the increase are below the market prices.
Do they directly subsidise the difference or let the state-owned electricity company work at a loss? Or partly both?
It seems this policy may be in connection to one enacted in 2022: https://www.lemonde.fr/en/france/article/2022/09/14/france-to-limit-energy-price-hikes-to-15-in-2023_5996945_7.html
āVery early on, we took strong measures to protect the French public. But everyone knows, and we have to say it transparently: These measures come at a cost to our public finances,ā Ms. Borne said in justification of the less generous caps. In total, the governmentās capping measures next year are expected to cost ā¬16 billion, Finance Minister Bruno Le Maire said at the conference, with ā¬11 billion going toward gas and ā¬5 billion on electricity."
So I would say that the French govt. directly subsidizes this price regulation
Ah thanks, I didnāt see the connection in the Reuters article with the Russian war and recent inflation but itās right there in the middle part:
In May, Finance Minister Bruno Le Maire said Franceās cap on electricity prices would be phased out and end at the end of next year.
Lots of countries have subsidised energy because of the war, so nothing unusual happening. When I read the news, I was thinking about the overall debt that EDF is collecting over the years and thinking about price increases to help here. But that is completely unrelated.
https://www.statista.com/statistics/1342612/debt-of-edf-group/
