French gas utilities axe fixed customer deals
French gas utilities are triggering the break clause in contracts held by customers on fixed price tariffs, as they can no longer sustain the cost differential with soaring wholesale prices, ConnexionFrance reported April 20.
Customers will be required to switch to a tariff that tracks current gas prices, or look for a new supplier on the French market. Courbevoie-headquartered LPG producer Antargaz, which has a natural gas distribution unit, has reportedly started to cancel its fixed gas delivery contracts. One of its customers was told it no longer had "the means" to provide gas at a "decent" tariff.
Downstream energy prices rising to multi-year highs have led to a raft of state interventions - price caps, tax cuts or energy rebates - finding favour across multiple EU member states. The market fundamentals remain affected by the situation in Ukraine, although warmer weather has reduced demand-side pressures on future contracts for near-term delivery.
Bloomberg said on April 19 that European gas prices had dipped to the lowest level recorded since the start of Moscow's invasion of Ukraine in February. Benchmark Dutch gas futures fell 1.9% to €93.77/MWh, while futures for delivery at the UK's National Balancing Point drifted 2.2% lower. However they rebounded the following day, Bloomberg said, amid reduced gas flows from Russian suppliers.
Paris had pledged to cap household energy bills, in addition to lowering taxes and duties on energy production. EDF expects the price cap, together with a state demand to sell nuclear electricity at below market prices, to reduce its earnings by around €10bn ($10.8bn), according to the Financial Times.
An economist quoted by the FT said state interventions may discourage customers from reducing energy consumption, making it harder to achieve independence from Russia in the longer-term. Moscow has toned down the rhetoric on its ruble-only gas payments demand in recent weeks, arguably removing a deterrent for Gazprom's European gas purchasers.