Reuters reported that French utilities have appealed against a government decision to freeze household gas prices that they claim prevents power group GDF Suez from covering higher raw material costs and impedes fair competition.

Mr Altergaz and Vattenfall energy utilities association Anode said that the government’s refusal to pass on higher energy costs is unsustainable for 36% state owned GDF Suez and could harm competitors such as Poweo.

The move which Anode called illegal could also put off foreign companies from setting up shop in the French market, the association added. Anode has taken the case to France’s highest administrative court, the Council of State.

Anode said that one day or another will be passed onto consumers. The tariff freeze will only be temporary they will all need to pay the bill in the end, including the adjustments which will be even more painful.

The government’s decision earlier this year to freeze gas tariffs for households until October was widely seen as a political move ahead of next year’s presidential election.

Anode’s complaint follows concerns expressed by the French energy regulator earlier this year that a tariff freeze hampered the functioning of the natural gas market and that passing on higher raw material prices to consumers was legitimate.

(Sourced from Reuters)