Companies will pay more for gas from today (April 1), the National Oil and Gas Authority (Noga) announced yesterday.
Readjusted diesel prices were given the green light by Bahrain’s Cabinet at its weekly session on January 12 as part of government plans to redirect subsidies to benefit eligible people only, said a report in the Gulf Daily News (GDN), our sister publication.
Under the new measures, companies will have to buy natural gas at the rate of $2.5 (940 fils) per one million British thermal unit (BTU).
Under a multi-phased readjustment programme, the price of natural gas will increase by 25 cents per one million BTU each year on the first of April, to top $4 (BD1.5) in 2022.
Noga officials announced that bills will be issued from today featuring the new prices for the gas sold to industrial projects, power and water stations and other consumers.
In a statement yesterday, they pointed out that the new prices would not affect citizens in anyway as they are only applicable to industrial plants.
“The growing demand for natural gas and limited output of locally-produced natural gas have prompted the authority to readjust prices,” a Noga statement said.
Officials hope the readjustment will strike a balance between Bahrain’s needs, preserving limited reserves from depletion and narrowing the price gap in local and international gas markets.
Customers would also be gradually prepared to buy imported gas at higher prices in future, compared with prices of locally-produced gas.
An international consultancy commissioned by Noga conducted a survey in 2013 to design a multi-phased price readjustment policy.
Bahrain is also following in the steps of other GCC countries which adopted readjusted gas pricing strategies to optimise natural resources.
“The new prices will contribute to generating additional revenues which would benefit the national economy,” Noga said.
Bahrain extracts gas as an “associate” of crude oil from Bahrain oil field. Bahrain National Gas Company derives propane, butane and naphtha from “associated” gas.
The “non-associated” gas, also known as Khuff gas, was discovered in 1948 in Bahrain. It is mainly used as a fuel in industrial projects, power generators and water recycling.
The Bapco refinery produces liquefied natural gas which is distributed in tanks and cylinders to homes and restaurants for cooking.
The readjustment will not affect the prices of liquefied gas.
Source: Trade Arabia