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Wednesday, 9 September 2020

Could industry see lower gas prices this month?

Could industry see lower gas prices this month? A government committee that will decide on gas prices to industry is reportedly considering lowering the price of natural gas when they meet this month, Masrawy reports, citing government sources. Gas prices for all industries could be lowered to at least USD 4 / mmBtu from USD 4.50 / mmBtu this month, when the gas pricing committee meets, the source noted. The committee has been studying consumption and prices in the local market and concluded that a USD 0.50 discount would be appropriate to support industry players, the source said without elaborating.

If true, this wouldn’t quite meet the USD 2.50-3.50 / mmBtu manufacturers have been angling for. The heads of export councils met with government officials last week to push for the discount, while a number of manufacturers took the local press earlier this week to advocate for a price cut and recommend a fluid pricing mechanism pegged to global prices. The government has cut gas prices twice in the past year: once in October and six months later as part of its stimulus measures to protect the economy from the fallout of the covid-19 pandemic.

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