French electricity prices to increase with phase-out of energy crisis tax cuts
Business
French electricity prices to increase with phase-out of energy crisis tax cuts
(AFP) - The cost of electricity will increase up to 9.8 percent during peak hours as of 1 February, and the base rate will go up 8.6 percent, Finance Minister Bruno Le Maire said in an interview Sunday evening on TF1 television.
“It’s a difficult decision, but a necessary decision,” he said, “to protect public finances”, and move away from the “whatever it costs” measures introduced to prop up the economy during the Covid-19 pandemic and extended as energy costs skyrocketed with Russia’s invasion of Ukraine.
In September the government promised to not raise electricity prices by more than ten percent in 2024.
The rate hike – a result in an increase in the power consumption tax cut in 2021 – will mean a family with two children living in a house will see their electricity costs go up 18 euros a month, Le Maire said.
President Emmanuel Macron said last week that electricity prices would return back to “normal” levels, while remaining lower than rates in neighbouring Spain, Germany, and Italy.
Le Maire said a second and final rate increase will be implemented in February 2025, to end the subsidies.
The Finance Ministry said that during the period of subsidies, the government had covered 37 percent of the country's electricity bill, amounting to €9 billion per year.
Jean-Yves Mano is president of the consumer association CLCV dealing with housing issues.
Interviewed by Franceinfo on Monday, he said this increase "could have been shifted to a more opportune time", such as in August or after the winter season, adding that 34 percent of the French population go without heating because they can't afford it.
He is calling on the government to increase incomes so that households can support additional increases, especially with regard to inflation.
“All of this is unbearable for many French people who do not have the financial capacity to bear these additional charges,” he said.
