“The price of natural gas sold by the Ministry of Oil and Gas to electricity generation plants has been increased, with effect from January 1, 2015, from US$1.50 per million British Thermal Units (MMBTU) to US$3 per MMBTU. The increase in the price of gas doubles the fuel cost for power generation in the Main Interconnected System (MIS) and Dhofar Power System (DPS) and has a significant impact on 2015 generation costs and electricity sector subsidy,” announced the Omani Authority for Electricity Regulation (AER) in a recently released report.

This means that the total subsidy in the electricity sector rise by 56% from RO287.1mn in 2014 to a RO448.3mn in 2015, reported Zawya. MIS includes the MEDC, Majan and Mazoon companies, with rising electricity production representing a 31% increase in costs since 2014.

In related news Oman’s Majan Electricity Company signed nine agreements for different projects worth more than RO7 million ($18.1 million), according to Trade Arabia, with eight tenders in store for cities and provinces across the country. “These projects are a part of the company’s efforts to expand the electrical network due to the expanding demand of electricity, which represents the growth of the country on both economical and demographical scales”, said Abdullah Al Hashmi, Majan’s chairman of the board of directors.

He added that there were “clauses” in the tender agreements meant to ensure “strict deadlines as well as the compliance with HSE standards, as this is one of the key pillars of the tenders and we hope that the plans will carry on in a timely manner under these conditions without delays”.