The cost of the energy price “tariff shield” since it was deployed in autumn 2021 to cushion inflation shocks has reached 24 billion euros, the Ministry of Economy and Economics said late on Thursday.
The most expensive measure concerns electricity: in 2022, the state will spend 10.5 billion euros to limit electricity price increases to 4%.
The bill for fuel price rebates will amount to 7.5 billion euros. Launched in April, the device was strengthened during September and October, with state support at 30 cents a litre, compared to 18 cents currently.
Finally, Bercy estimates that the gas price freeze will cost 6 billion euros between October 2021 and October 2022, noting that these figures “are designed to vary according to energy prices”, which have been very volatile in recent months.
The positive impact of the tariff shield on inflation
Electricity prices breached the 1,000-euro-per-megawatt-hour threshold last week, while natural gas was trading above 300-euro per megawatt-hour. The reason for the gas tensions is the drying up of flows from Russia, so it is a response to the economic sanctions that the Europeans have decided in response to their military offensive against Ukraine.
Low output at French nuclear power plants threatens power supplies: Only 24 of the country’s 56 nuclear reactors are currently operating, with another 32 shut down due to scheduled maintenance operations or corrosion problems.
In a study published on Thursday, INSEE highlighted the positive impact of the tariff shield on inflation. According to Insee, from the second quarter of 2021 to the second quarter of 2022, the period covered by the study, “rising energy prices contributed to 3.1 percentage points of the 5.3 percent inflation rate”. The ONS estimates that without the tariff shield, “inflation would have been 3.1 percentage points higher between the second quarter of 2021 and the second quarter of 2022”.
The government, which is currently preparing the 2023 Finance Bill, has pledged that increases in gas and electricity prices will remain “manageable” after the tariff shield expires on December 31, 2022. “Energy vouchers” will also be distributed to the most humble households to help pay their energy bills.