Wary of political fallout, France seeks to limit the surge in electricity prices


Steam rises from a cooling tower at the Electricité de France (EDF) nuclear power plant in Civaux, France, October 8, 2021. REUTERS / Stephane Mahe

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PARIS, Jan. 7 (Reuters) – The French government is working on new measures to limit the surge in electricity prices, the finance minister said on Friday, wary of the political fallout three months away from a presidential election.

“Look at what is happening in Kazakhstan, it is quite revealing of what can happen when energy prices explode, it is politically dangerous,” Finance Minister Bruno Le Maire told reporters in a speech by New Year.

Energy prices can be a sensitive subject in France. A fuel tax hike in 2018 sparked months of regular violent street protests that turned into a broader anti-government movement.

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As energy prices rose around the world last year, the government pledged to protect households by capping an increase in regulated tariffs for 2022 at just 4% in February. Since then, prices have increased further and the reduction in the electricity price tax which was supposed to limit the increase is no longer sufficient.

“If we do not find a solution to electricity prices in the coming days, the French will see an increase of 35 to 40% at the end of January,” said Le Maire.

“There are thousands of jobs at stake. That is why we have been working day and night for two weeks to find a solution that guarantees the ceiling of the price of electricity at 4% and protects energy-intensive companies”, a- he declared.

Paris has considered forcing the public electrician EDF (EDF.PA) to sell more nuclear production to its competitors at a preferential rate, thus preventing operators from paying very high prices on the wholesale markets which should also be applied to the regulated household tariff.

The Mayor said he had met with EDF President Jean-Bernard Levy and European Competition Commissioner Margrethe Vestager, who is in Paris with other European Commissioners for the start of the French presidency of six month of the European Union.

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Reporting by Leigh Thomas; Additional reporting by Benjamin Mallet; edited by David Evans

Our Standards: Thomson Reuters Trust Principles.

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