French gas prices will not rise in the coming months under an agreement between the finance ministry and Gaz de France the finance ministry said in a statement on Friday.
Earlier, Le Parisien newspaper said French gas prices would not rise this year, quoting a source in the office of Finance Minister Jean-Louis Borloo, who met Gaz de France (GDF) Chief Executive Jean-Francois Cirelli on Thursday. In a statement, Borloo said tariffs would not rise "in the coming months," which a source close to the situation said meant until December.
"When the minister says several months, you have to understand until the end of the year," the source told Reuters. Gaz de France, which is 79.8 percent owned by the French state, declined to comment. Traders said the announcement capped shares of Gaz de France, which were up only 0.1 percent at 36.08 euros by 1100 GMT, lagging a 0.5 percent rise in Europe's FTSEurofirst 300 index of top European shares.
Borloo said he took the decision to delay a rise in order to "maintain the buying power of consumers ahead of the full energy market opening, and to preserve the financial balance of GDF."
"In a general way, I will pay attention that the market opening is favourable for consumers." Earlier this week, the energy branch of the French CGT union had asked the government to drop gas tariffs by 10 percent to raise consumers' buying power.
Finding ways to boost consumer purchasing power was a major theme of last month's presidential election. It has also been a theme of legislative elections, the final round of which will be held on Sunday. On July 1, all French households will have the possibility to leave state-subsidised tariffs and switch to free-market offers.