France Approves New Gas Price Hike

French utility GDF Suez has been granted government approval to raise consumer tariffs by 2.4%. The new prices will come into force at the start of next year, Energy Minister Delphine Batho said.

The increase will take into account new contract terms between the utility and long-term suppliers, agencies reported. So-called social rates will be extended to 830,000 more low earners and the system for calculating rates has been revised.

Today’s decision on tariffs follows a ruling by the country’s highest court last month that a previous 2% increase in consumer gas rates was insufficient to allow French natural-gas distributors to cover costs. The legal challenge came from an organization called Anode, which represents gas distributors and is seeking to compete with GDF Suez, which previously held a monopoly supplier. GDF Suez has mounted separate court cases against the government over tariffs.

“We have asked GDF Suez to renegotiate its long-term supply contracts and this has helped us limit the increase,” Batho said Monday. The proportion of supply indexed to spot market prices for natural gas will be increased to 36% in January from 26%, she told a press conference.