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.