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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