Does the gas price freeze apply to all contract types in France?

Reader question: I have received a letter from the government telling me I need to take out a new gas contract. It suggests that all offers are covered by the price protection but I thought this was just for regulated tariffs?

When the gas price freeze was announced at the beginning of the energy crisis, it applied first and foremost to the ‘regulated’ tariff (ie. Engie’s offer of a price fixed by rules set by the government).

Regulated prices were frozen in November 2021, then limited to a 15% rise in January 2023.

The freeze is set in law until June 30 this year but Prime Minister Elisabeth Borne has stated that it will be extended until the end of the year.

Clients who had taken out a market-rate contract indexed to the regulated prices, so they would rise and fall at the same rate as these, also benefited.

With the regulated tariff due to end, the government has written to those affected, advising them to sign up to a contract at market rates.

It states: “You will retain the benefits of the price shield introduced by the government in October 2021, which now applies to all offers.”

This will have come as a surprise to many, since the expanded scope of the measure was not publicised to nearly the same extent as the original announcement.

Caroline Keller, head of information and communication at the Médiateur National de l’Energie (MNE), the energy ombudsman, said: “Since September 2022, energy providers have received financial compensation for new contracts, to compensate for the difference between the regulated tariffs as they would have been without the price shield [based on real costs to companies in obtaining supplies on the international wholesale markets], and the regulated tariffs with the price shield.”

Freeze now applies to all contracts

Previously, this compensation was only available with regard to regulated tariff offers and offers indexed to this, but it now applies to all contracts.

The upshot, regarding unindexed market tariffs, is that firms will receive the same compensation, so they should pass this on to the customers.

This means the rates charged might not be exactly the same as the regulated ones, but should nonetheless not be subject to huge hikes.

This protection does not apply to existing ‘market rate’ contracts taken out before September 2022. Anybody can switch gas suppliers at any time, at no cost.

You can compare prices via the MNE’s comparison tool comparateur-offres.energie-info.fr.

It is still important to remain vigilant because, even though all offers are now covered by price protection, this does not prevent suppliers from changing the terms of your contract.

Note, however, they should not change your tariff if it is stated to be at a fixed rate for a given period.

Ms Keller cited one firm whose indexed offer was 10% less than the regulated tariff, before changing to 7% less, and is now level with it.

Such changes are allowed if the firm gives a reason and allows a month’s notice.

In which case, you are free to change suppliers if you find a better offer.

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