the tariff shield maintained despite the war in Ukraine?

GAS PRICE. The bombardments dictated by Vladimir Putin continue in Russia. Enough to cast doubt on the supply and price of gas in Europe. An increase despite the tariff shield? A risk of shortage? We take stock.

[Mis à jour le 25 février 2021 à 16h11] The invasion of Ukraine by Russian troops continues this Friday, February 25. A war that could have dramatic consequences for the rest of Europe and France, particularly in terms of gas supply. In a context of already galloping inflation in France, the Government has decided to apply a price shield to limit this price increase, in effect until June 30, 2022. But because of the situation in Ukraine, what will the executive do? Is it possible to go back? Well not in the least, if we are to believe the words of the Minister of the Economy, Bruno Le Maire this Wednesday, February 23: “We have made a commitment to freeze gas prices, this commitment will be respected for individuals. This freeze runs until the summer of 2022. If it ever has to be extended because we are seeing an explosion in the price of gas, it seems essential to me to do so..” However, a more embarrassing outcome cannot be ruled out. For example, the price of British natural gas has already exploded over 30%.

What about the war in Ukraine? Today, the European Union imports 40% its gas from the Russia. So, if the master of the Kremlin decides to cut off supplies, some EU member countries could find themselves in great difficulty. Be careful, this is not the time for self-pity in view of the specific situation of France in this affair. Norway, Russia, Algeria… The gas imported by France is divided between different producers, unlike theGermany. Besides the Rhine, our neighbors would depend up to 60% Russian gas.

Today, 40% of European gas is imported from Russia. Be careful, however, only 17% of French gas comes from Russia, there is the big difference with ultra-dependent countries like Germany. Across the Rhine, our neighbors are dependent from 55% to 60% towards the Russia in terms of gas imports. Also, the pipeline North Stream 2 has just been completed between Russia and Germany. German Chancellor Olaf Scholz has already suspended the authorization for this gas pipeline. Germany finds itself trapped, and could be in great difficulty in the event of a cold snap.

If Russia decides to no longer supply France with gas, France will still have the possibility of supplying itself with Norway (36% gas imported into France) or Algeria (8% gas imported into France), France’s other gas trading partners. Please note that these countries have much more limited supply capacities than Russia. This import of liquefied gas from Norway and Algeria remains, today, the most serious and interesting track if Russia were to stop supplying Europe.

The price of natural gas in Europe is already soaring to reach 108 euros per megawatt hour. First visible consequence of the war in Ukraine. So, is there a real risk of rising prices in France? Absolutely. There is a good chance that gas will be much more expensive in the weeks to come, but there should not be a lack of gas, for the moment, a hint of good news in this ambient slump.

Important, the French remain protected by the tariff shield introduced by the Government. What about companies? These could bear the brunt of the effects of the war in Ukraine. Adverse effects that would immediately impact their competitiveness.

Presented as the European reference price for gas, the Dutch TTF has experienced a real explosion since the beginning of this week, around 120 euros per megawatt hour on Friday. Since Monday, contracts have soared by 50%. A bad omen before a potential rise in gas prices in France.

In France, there is no reason to worry, for the time being. Firstly, with Italy, France is the best European student in terms of gas storage according to The Parisian. This greatly protects us, initially, from the risk of lack of supply and variations in supply. Secondly, France has three LNG terminals: Montoir-de-Bretagne (Loire-Atlantique), Fos-sur-Mer (Bouches-du-Rhône) and Dunkirk (North). A considerable advantage which should make it possible to supply French customers with peace of mind in the coming weeks.

Remember that in France, suppliers are required to store gas for several months, in layers. And that’s good news, the French tablecloths are almost full. This covers 1/4 of the annual consumption. The difficulty will be to restock them at the end of winter. Otherwise, major difficulties are to be expected for next winter.

Good news for households that still depend today on regulated gas prices? In addition to the creation of an inflation allowance instead of a fuel check, the Prime Minister announced that the tariff shield used to freeze gas prices will be extended until the end of 2022, instead of April.

To justify this decision, Jean Castex explained that the decline in prices will be slower than expected. The tenant of Matignon has however ruled out, for the time being, any measure leading to a reduction in taxation. But concretely, what does this measure mean for consumers? Gas prices will, of course, be frozen until the end of the year next year. On the other hand, from the beginning of 2023, the price of gas will cost consumers a little more than market prices, so that the sums paid in addition during the winter by the operators are recovered. Since the beginning of the year, the regulated price has jumped by more than 50% since January. There was urgency as the mercury prepares to descend.

The consumer is facing a veritable spike in gas prices in recent months. For households using gas as a means of cooking, but also for heating, the successive increases will seriously affect the end-of-year budget. The Energy Regulatory Commission (CRE) has indeed announced a mess of increases in recent months, these increases affecting the regulated gas prices charged by Engie. They act indirectly on market prices. We summarize what has happened in recent months:

  • +10% in July 2021
  • +5% in August 2021
  • +8.7% in September 2021
  • +12.6% in October 2021
  • +15% announced on November 1, 2021.

The government recently announced the payment of an additional energy check of 100 euros for the 5.8 million households benefiting from the energy check. Payment is scheduled for December. To find out more, see our dedicated article:

Are you still dependent on regulated gas prices? This price increase is not the only reason to look elsewhere! Since the Energy and Climate law adopted in 2019, regulated tariffs are gradually disappearing. Engie has ceased to market new contracts at regulated sales tariffs (TRV), since November 2019, which means that you will soon change your contract. If you have an Engie contract, don’t panic. It remains valid until June 30, 2023. In this context of crisis, are you studying the possibility of changing your energy supplier more seriously? Consult our dedicated file without further delay:

Be careful, however, since if you have not changed your contract yourself, you will see your contract automatically switch to a market offer from Engie, from July 1, 2023. If you change supplier, get information on the site of the national energy ombudsman, herewhich offers a comparator of offers to find the formula that meets your consumption needs.

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