The French government may see a rise in tax revenue from gas in the coming years, even though it has experienced a drop in income from fuel taxes, according to recent reports. While fuel-related tax income has decreased despite higher prices, the gas market is expected to generate an extra 200 million euros in tax revenue by 2026. This potential increase is linked to the value-added tax (VAT), which is calculated based on the total of bills and would automatically rise with higher prices. However, the actual amount will depend on how much households consume and the severity of winter temperatures.
According to David Amiel, the minister of Public Accounts, tax revenues from fuels had dropped by 407 million euros by September 20 compared to the same time in 2025. Although the rise in fuel prices generated an extra 710 million euros in VAT, this was more than offset by a 1.117 billion euro decline in excise tax revenues. Meanwhile, the European wholesale gas price (TTF) has more than doubled since the start of the year, rising from about 30 euros per MWh to nearly 80 euros per MWh by mid-September, and remaining around 70 to 75 euros per MWh by the end of September.
The Energy Regulation Commission (CRE) estimates that the average gas bill for the 6 million households whose prices are tied to a reference rate will increase by 10% this year. At current prices, and assuming winter temperatures stay within normal ranges, the additional tax revenue for the state could reach approximately 200 million euros in 2026, according to calculations by BFM Business. This estimate is closely linked to consumption levels, as heating makes up the majority of residential gas use. A milder winter could lower consumption and thus both bills and tax revenues, while a colder winter could boost revenues beyond the estimated amount.
Marin Gillot, an energy expert at Strategic Perspectives, explained that gas taxation includes VAT, which is proportional to the bill amount, and excise duties, which depend on consumption. Therefore, how households respond to price changes could influence the state's ability to generate revenue from this situation.
If there is a surplus, some may call for the funds to be redistributed, similar to the price caps on fuel by Totalenergies. Engie has announced an exceptional aid of 75 euros for its most vulnerable customers, which will be given to beneficiaries of the energy check, around 720,000 customers, representing a 54 million euro budget for the energy company.
The rise in gas prices is expected to reignite the debate on energy taxation, as it appears to be out of alignment with the goals of the French government and the European Union, which aim to gradually reduce the use of fossil fuels and increase the electrification of vehicles, heating, and industry. The Council of Mandatory Levies has recently recommended increasing taxes on gas to reduce those on electricity. As of August 1, the excise tax paid by households is 24.69 euros per MWh for electricity, compared to 10.73 euros per MWh for gas. This tax is more than twice as high for electricity, the energy sector the government is trying to encourage consumers to shift to.
France's Energy Tax Revenue Outlook Shifts as Gas Prices Rise
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