Oman outlines plans to hike gas prices to major industrial users

05 March 2013

Oil and gas minister said smaller consumers such as cement industry will not be impacted

Oman plans to double the price of gas it sells to major industrial users to $3 a million BTUs by 2015, the sultanate’s Oil & Gas Minister Mohammed bin Hamad al-Rumhy said.

Prices for sales to large, exporting sectors, such as aluminium and fertilisers, were increased to $1.5 a million BTUs in January 2012 and will be hiked 50 cents a year to $3 a million BTUs in 2015.

“Thereafter, it will increase by 3 per cent or the rate of inflation – whichever is higher,” Al-Rumhy said at a press conference in Muscat.

The minister said the price hike would not be extended to smaller gas consumers such as cement manufacturers.  

“We consider the cement industry to be a smaller consumer of gas,” said the minister. “Compared with fertilisers and aluminium, they are consuming a relatively smaller volume [of gas] and the product is mostly for local consumption, rather than export like the big industrial users [which are making higher margins].”

Consumption of gas in Oman has risen significantly over the past decade, driven by industrial expansion and a growing population. Al-Rumhy said the government would prioritise the power, water and hydrocarbons sectors when allocating gas from new upstream assets.

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