France Limits Electricity and Gas Price Increase to 15% Next Year

Elisabeth Borne, Prime Minister of France
Photo by Reuters-Yonhap News

[Asia Economy Reporter Park Byung-hee] The French government plans to cap next year's electricity and gas price increases for households and small businesses at 15%, Bloomberg reported on the 14th (local time).

French Prime Minister ?lisabeth Borne stated at a press conference that the government would limit electricity and gas price hikes, warning that without a cap, prices could rise by up to 120% next year. She also announced that subsidies would continue, with up to 200 euros provided to 12 million low-income households.

French Minister of Economy Bruno Le Maire said that the government's fiscal loss due to limiting energy price increases would reach 45 billion euros. However, with the windfall tax proposed by the EU, the government's net fiscal loss would be 16 billion euros, broken down into 11 billion euros from gas price caps and 5 billion euros from electricity price caps. Minister Le Maire also explained that fiscal spending on subsidies would amount to 1.8 billion euros.

France is one of the countries that proactively responded to rising energy prices. In October last year, it froze gas prices, and in February this year, it limited electricity price increases to 4%.

Thanks to these measures, France's inflation rate is relatively lower than that of other European countries. While the Eurozone's consumer price inflation rate was 9.1% in August, France's inflation rate remained at 6.5%.