The French government has announced a significant reduction in electricity prices due to take effect on February 1, 2025, even as the existing tarif shield is set to end. According to Minister of Industry Marc Ferracci, households can expect to see the regulated electricity tariff decrease by 14%, reflecting adjustments to international market prices.
This welcomed news arrives after the government had initially aimed to introduce tax increases to cover public budget deficits. These planned increases, announced under Prime Minister Michel Barnier's administration, would have curtailed the reduction and limited the benefit to consumers. Instead, the absence of these hikes means households will enjoy relatively lower electricity costs.
The official decree published on December 28 confirmed the cessation of the tarif shield, which had been implemented as response to sharp spikes caused by tumultuous market conditions. Ferracci emphasized, "The increases of taxes planned in the initial finance bill do not take effect."
Under the new rule, the regulated tariff will adjust to its pre-crisis level of €33.70 per megawatt-hour for households, up from €22 currently. The government had reassured citizens about the tariff reduction, an initiative supported by Barnier when he explained, "This will allow for a 14% decrease in electricity prices."
The increase originally proposed would have generated up to €3.4 billion for the state. It was meant as part of Barnier’s efforts to navigate the public finances and control the deficit. "This measure garnered significant opposition from various parties, particularly National Rally (RN) and France Insoumise (LFI), who expressed concern about the impact on consumers’ bills,” several sources noted.
With 22.4 million households and enterprises relying on regulated tariffs, approximately 76% of French citizens are set to benefit from these considerable savings. Over the past two years, electricity prices had surged approximately 40%, largely fueled by tensions related to the war in Ukraine and overall inflationary pressures.”
The decision to cancel the planned tax increase is being viewed as pivotal for many households struggling with rising utility costs. The forecasted drop signifies the government’s attempt to alleviate financial burdens on citizens and stabilize public sentiment.
Expert analyses indicate future electricity pricing may continue to fluctuate depending on international energy markets. It remains to be seen how effective the government’s measures will be in the long term for the economy and individual consumers.
Nonetheless, the official stance is clear: the impulsive measures taken to stave off unnecessary costs to the consumer reflect the government's responsiveness to economic realities. With February fast approaching, many households are breathing sighs of relief with the news of impending price reductions.
