Gas benchmark price: its calculation changes on July 1, 2024!

Gas benchmark price: its calculation changes on July 1, 2024!
Gas benchmark price: its calculation changes on July 1, 2024!

In one year of existence, the benchmark gas sales price (PRVG), established by the CRE, has become a reference in the French energy landscape. At the end of a public consultation launched in April, the energy regulator announced at the end of May the evolution of the methods for calculating this indicator. What changes have been made, applicable from July 1, 2024, and which will certainly impact the consumer’s gas bill? explains.

published on 05/30/2024 at 2:38 p.m. |
Updated 05/30/2024 at 2:38 p.m.
| by
Johann Sonneck

A public consultation proposed by the CRE on the benchmark sales price of natural gas (PRVG)

At the beginning of April 2024, the Energy Regulatory Commission (CRE) launched a public consultation relating to the benchmark sales price of natural gas (PRVG). Its object:evolution of the methodology for constructing this tariff, created almost a year ago, in June 2023. This new calculation was made necessary by the end of regulated gas sales prices (TRVG). Since then, this benchmark gas price has become an important indicator so that:

  • THE suppliers can set the price of their offersgenerally following the evolution of the CRE tariff, updated monthly;
  • THE consumers can find a useful reference in their search for a new gas contract. For this purpose, it is often advisable to compare the different proposals before committing, for example by using the Energy Comparator.

The energy policeman in France also believes “thataround 2 million residential gas consumers currently have a contract indexed to the PRVG “. In this spring of 2024, he wanted to gather the opinions of players in the sector on the evolution of the calculation of this price. Closed on April 28, 2024, this public consultation of scope n° 2024-04 allowed each of them to submit written contributions to make their voices heard, whether:

  • of gas suppliers ;
  • ofconsumer associations ;
  • ofindustrial players operating in the gas sector.

The CRE’s objective: that the supply costs of natural gas, one of the criteria taken into account, are more representative of the wholesale market. This is actually characterized by a very high price volatility in recent years, culminating in the 2022 energy crisis.

Symbol of this price variability, the CRE’s PRVG also experiences very diverse dynamics since its establishment:

  • after a first drop at the end of summer 2023, it continued to climb throughout the end of last year. It has thus had a strong impact in the same direction on the bill for residential gas consumers;
  • a period of decline followed, from January to April 2024favorable to the purchasing power of the French;
  • However, the month of May was synonymous with return to the risecontinued in June 2024 with another increase in the benchmark gas price (PRG).

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Different developments in the PRVG calculation methodology, effective from 1er July 2024

In its public consultation in April, several avenues for development were proposed by the CRE. For her, this consultation and its consequences take place in a desire to improve the resilience of the country’s energy supply. His other important wish is to better match:

  • the pricing of fossil fuels;
  • to real conditions on wholesale markets.

On May 23, the regulator published the deliberation following this process of reflection around the benchmark price construction methodology. He thus made it known that thirteen different actors responded to this consultation:

  • 5 gas suppliers ;
  • 2 consumer associations ;
  • 4 gas company associations ;
  • 1 union federation;
  • 1 CEE market platform (Energy saving certificates).

THE main lessons to remember are the following:

  • thanks to the feedback collected, the CRE affirms that the majority of stakeholders “consider the PRVG as a effective consumer support tool “. Subject of reflection for the regulator for the future: the possibility of publishing, in addition to the PRVG, a second special benchmark price “fixed price offer”. As it stands, the stakeholders interviewed spoke out against the creation of this new tariff;
  • faced with skepticism and “strong opposition from suppliers”, the CRE decided to not to change, for the moment, its “supply share indexation formula”. However, it reserves the right, in the future, to propose a new specific consultation on this subject;
  • the regulator also announced that it “ will update on 1er July of each year the consumption levels retained for the preparation of the PRVG “. To do this, it will establish its calculation using the reference annual consumption data (CAR) provided by GRDF in the previous April;
  • another option: adapt the coefficients of the formula used to the new realities of the European gas market. Thus, the CRE notes, from the responses obtained, that “the structure currently used [pour l’intégration des coûts commerciaux] is not satisfactory. It will therefore also carry out a updating of its “commercial costs” component to better take into account inflation. In addition, “a construction of the PRVG by stacking costs” will now be practiced;
  • final thought: include new parameters in its calculation, such as the costs of transport by gas pipeline or underground storage. The goal: to give birth to a more comprehensive indicator. The CRE also judges that the strengthening of energy sobriety “could lead to a undercoverage of suppliers’ real costs » regarding their commercial, transport and storage costs. It therefore offers them joint work to take the proper measure of this effect. Thus, its consideration could include the gas benchmark price (PRG) “from 2025”.

For the rest, all of the regulator’s decisions set out in these deliberations will apply “from 1er July 2024 ». On the electricity side, the Energy Regulatory Commission is also currently considering offering off-peak hours during the day.

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