Focus on France 11 August 2008

France increases gas and electricity prices

Article published on the 2008-08-11 Latest update 2008-08-11 14:33 TU

Edouard Petitjean of Consommation, Logement, Cadre de Vie (CVCL)
(Photo: D Brown)

The cost of living is once again under scrutiny in France as a special commission decides whether to validate a demand by the government to increase the price of electricity and gas. This will be the third such price hike in 2008, a development that consumer groups are calling unacceptable.

France’s Energy Regulation Commission met on Monday and observers believe it is likely to rubberstamp increased electricity prices by 5 percent and gas by 2 percent. If the requests go through, the new prices are to be implemented Friday 15 August. The authorities have promised to compensate the two million French households that live below the poverty line.

The French Consommation, Logement, Cadre de vie (CLCV) watchdog association has denounced the measures as unacceptable. The CLCV's Edouard Petitjean says “A lot of people are worried about their purchasing power these days,” he told RFI, “and this increase means an extra 150 euros per household per year. It’s really bad news.”

Nevertheless, this price hike puts France on a par with most European countries, while energy here remains almost half what it costs in Sweden and Denmark.

A country which is seeing staggering price increases this summer is Britain. The internet service uSwitch.com estimates that gas and electricity prices there are now among the highest in Europe. It follows increases this year of 45 per cent by British Gas, for example.

Ann Robinson is director of consumer policy at this internet price comparison service. “It’s been very very difficult,” she explained, “We already have about 4.5 million people in what we call "fuel poverty". This represents people who have to spend ten per cent or more of their income just to be able to keep warm. Increases of this sort are likely to put the number of people in fuel poverty at something like 5.5 million people.

This is a situation which energy watchdogs are denouncing vehemently because, they say, gas and electricity companies are still showing a healthy profit margin this year.  RFI was not able to find anyone in the Finance Ministry in Paris to comment. The press officer there admitted that most politicians are currently on holiday.