Gerard Mestrallet, the chief executive of GDF Suez SA (GSZ.FR), Tuesday said his company will accept the 2.4% increase in natural gas tariff set by the French government from Jan. 1, as the hike reflects its supply cost increase.
Gerard Mestrallet, the chief executive of GDF Suez SA (GSZ.FR), Tuesday
said his company will accept the 2.4% increase in natural gas tariff set by the
French government from Jan. 1, as the hike reflects its supply cost increase.
In an interview with local radio station France Info, Mr. Mestrallet said his
company is currently negotiating a 2.4% increase with a "large natural gas
supplier" he didn't identify.
Natural gas tariffs, which are regulated in
France
, have
been the subject of intense debate, as the government has sought to limit
tariff increases while gas distributors, like GDF Suez, were tied to suppliers
with long term contracts that tied costs to international oil prices.
"These contracts were 100% tied to oil. This is now changing after
renegotiations that will allow French customers to pay less for their
gas," Mr. Mestrallet said. Recently,
France
's
highest administrative court ruled against government-set limits to tariff
increases as they didn't compensate gas providers for their supply costs, and
allowed them to recover the past shortfall through increased customers' bills.
Monday, French Energy Minister Delphine Batho said the government is working on
a new method to calculate regulated gas tariffs.
GDF Suez last week said the shortfall in terms of earnings before interest,
tax, depreciation and amortization, or Ebitda, in 2012 amounted to 185 million
euros ($239.1 million), with a shortfall of EUR165 million for the last quarter
alone.
Separately, Mr. Mestrallet said his company doesn't intend to sell shares of
Suez Environnement (SEV.FR) despite not renewing a shareholders pact due to
expire in mid 2013.
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