2023-12-30 19:45:00
The exit from the price shield announced by the government will materialize on January 1, 2024. One of the taxes paid by natural gas suppliers, the excise, will almost double, which should automatically increase the bill for subscribers. The normal excise rate on natural gas for fuel use, which has replaced the domestic consumption tax on natural gas since 2022, will increase to 16.37 euros per megawatt hour (MWh) from January 1, compared to 8. 45 euros currently, according to a decree published on Saturday in the Official Journal.
This price corresponds to the ceiling authorized by the 2024 finance law, published the same day in the Official Journal. By comparison, the reference price for natural gas on the European market was around 32 euros/MWh on Friday, after having well exceeded 100 euros in 2022, with peaks at more than 300 euros.
“An increase in the gas bill of around 8 euros per megawatt hour”
“For half of gas subscribers who have opted for a fixed price tariff offer, the increase in excise duty will lead to an increase in the gas bill of around 8 euros per megawatt hour,” explains to AFP Nicolas Goldberg, analyst specializing in energy at Colombus Consulting. As individual bills are often presented in kWh, this equates to an increase of 0.8 cents per kWh. Many current fixed offers are offered by suppliers at a little more than 0.100 euros including tax, or 10 cents, per kWh.
The other half of subscribers signed offers based on an index, called a “sales benchmark”, established every month by the Energy Regulatory Commission. At the Ministry of the Economy, it is estimated that this index could fall, going from 123 euros/MWh in December for consumption linked to cooking or hot water in the low range, to an average of 114 euros over the first three month of the year, according to market expectations to date. The consumer would therefore not benefit from the drop in prices, since the tax would keep the gas bill around the price paid in December. The current price is at the same level as that of the exit from the tariff shield, on July 1, 2023.
The Minister of the Economy, Bruno Le Maire, indicated in September that the tax increase would be “without impact on the consumer”. The increase in excise duty should generate 1.9 billion euros in savings for the State.
Another rise in gas prices looms
For several months, the executive has been organizing the gradual exit from the tariff shield, deployed since the end of 2021 to moderate the impact of the surge in gas and electricity prices. Since July 1, there are no longer regulated gas sales tariffs (TRVG), which allowed the government to directly limit price increases. Instead, a “benchmark” price from the Energy Regulatory Commission, updated every month, must serve as a guide, based on market prices. It serves as the basis for “gateway” pricing offers.
Another increase for gas is also looming, which will also be reflected in bills: the gas distribution rate, which accounts for around a quarter of the final bill, will increase on July 1, 2024; the Energy Regulatory Commission must determine by how much, by early January.
Concerning electricity, no new tax increase has been published in the Official Journal. The government could raise the regulated tariff in February, but has committed to ensuring that the increase is less than 10% compared to the level of August 2023. “Many experts including myself believe that an increase in the excise on electricity prices would be a serious error at a time when we are encouraging people to electrify their uses for heating or vehicles,” added Mr. Goldberg.
The internal tax on final electricity consumption is currently 1 euro per MWh. Before the crisis, it was 22.50 euros. “It would be a mistake to raise it to the previous level, because for two years, in 2022 and 2023, electricity prices have increased by an average of 30% in France, which is unheard of. The message sent by the government would be catastrophic,” argued Mr. Goldberg.
#gas #tax #double