Rising energy bills: France to keep price cap in 2023
The measure has already stopped prices from increasing by 40% and has kept inflation lower in France than in many other countries – but it has cost the state €24billion
Government measures have already limited energy bill costs to a 4% rise, rather than 40%, the government has said
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[Article updated September 5 at 16:00 with further details on the price cap.]
France is to maintain its energy price cap into 2023 so as to continue to ‘protect the purchasing power of people in France’, the budget minister has said.
Gabriel Attal, former government spokesperson and now minister of public action and accounts, made the announcement on Saturday, September 3 on France Inter. He said: “We must not let bills nor our public finances become derailed.”
He added: “The measures that we have taken this year have limited inflation. If the government had not taken these measures, we would have seen inflation at three percentage points higher.”
Economy Minister Bruno Le Maire had already made a similar announcement several days prior. He said: “Without the energy cap, the increase in gas and electricity prices would be at least 100% next year. That would be an average rise of around €100 per month per household.”
He added that there would be a rise in energy bills in 2023, but that it would be "contained and reasonable in comparison to the worst case scenario" thanks to government measures.
Read more: Energy bills in France ‘would double in 2023 without state protection’
Mr Attal did not state a level to which prices would continue to be capped, but said: “In 2022, we blocked a rise that should have been 40% at just 4%. If you keep the same figures in mind, you will have some idea [of what will happen in 2023].”
This suggests that electricity prices could be capped at a 10% rise.
“Spending without counting [what you have spent] ends up meaning taxes to reimburse [the state] and we want to avoid that for the French people, so we have gone from ‘whatever it costs’ to ‘how much it costs’,” Mr Attal said.
“We are obliged to make decisions which, when they are costly for the public coffers, must be as effective as possible , which does not mean that the effort shouldn’t be shared.”
He said that the budget for 2023 would “provide for budgetary credits”, which will “in the case of a significant rise, help to support the most modest [low-income] households”.
The ‘bouclier tarifaire' (tariff shield) saw regulated gas prices frozen and electricity rates capped at a rise of 4% in autumn 2021.
It has meant that inflation in France has remained lower than in other countries, including the UK, where it hit 10.1% over a year in July.
A study carried out by national statistics institute Insee has suggested that without the price freeze "inflation between the second quarter of 2021 and the second quarter of 2022 would have been 3.1% higher".
France has still seen relatively high inflation rates, however. In July 2022, Insee said that consumption prices and inflation were at 6.1% year-on-year.
The bouclier tarifaire measure is very expensive for the state, costing €24billion since autumn 2021.
This is in addition to the vehicle fuel rebate, which has risen from 18 to 30 cents per litre this month and is set to last until a drop in November and its removal at the end of December. This has a budget of €7.5billion.
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