PARIS, April 18 France should gradually phase
out regulated gas tariffs because they hinder competition and
keep prices artificially high, the country's competition
authority said on Thursday.
Regulated gas prices in France are based on a formula which
includes the cost of procurement, transport, storage,
distribution and commercialisation for market leader GDF Suez
However, the system has failed to lower consumer prices, the
antitrust body said, noting that French residential gas prices
are well above the European average and above prices in Germany
and Britain, where gas price regulation has been abolished.
"Regulated gas tariffs have a negative influence on
competition, and do not benefit the competitiveness of French
companies nor the purchasing power of French consumers," the
Autorite de la Concurrence said in a recommendation to the
government about the reform of the gas market.
Since 2007, gas companies are also able to sell gas at
unregulated prices, but the regulated gas market makes it
difficult for other firms to break the stronghold of GDF Suez,
which controls 90 percent of the residential gas market.
Of the remaining 10 percent, 7 percent has been captured by
state-owned EDF, which uses its dominant position in
electricity distribution to also sell gas to its customers - at
prices even higher than GDF Suez's, the antitrust body said.
France's Poweo Direct Energie and Italy's Eni
each have about 1.5 percent of the market, but have
been unable to gain a bigger share, despite selling gas up to 15
percent cheaper than GDF Suez.
Foreign players like Germany's E.ON and RWE
and the Netherlands' Nuon avoid investing in
the French retail market, despite their presence in several
other European countries, as the regulated tariffs are too big a
risk for them, the antitrust body said.
Unlike other countries, France does little to inform its
citizens about the possibility of switching suppliers, and only
48 percent of the public knows this is possible, polls show.
The competition authority estimates the average residential
customer with gas heating could save up to 450 euros per year,
or 12 percent compared to regulated tariffs, by switching to
"The very presence of regulated tariffs is the principal
reason for the dysfunction of the French gas market," the
antitrust body said.
(Reporting by Geert De Clercq; Editing by Mark Potter)