Algeria takes one more step in the management of its energy sector. The Ministry of Energy and Mines announced the end of generalized subsidies on natural gas price for industrial, national or international players. This decision is included in the decree of October 13, 2024 and published in Official Journal No. 74. It marks a turning point in the regulation of hydrocarbons in Algeria.
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The order, signed by Mohamed Arkab, is part of a broader process of reviewing the legislation governing the sector. In particular, it focuses on article 146 of Law No. 19-13, adopted in December 2019. This law aimed to modernize the regulatory framework to better respond to market developments.
Consumption thresholds to be negotiated freely
With this reform, Algeria sets consumption thresholds forfree negotiation of gas prices. In other words, the cost of natural gas for industries now depends on the quantities consumed. For the period 2025-2026, companies whose annual consumption exceeds 200 million cubic meters (m³) will enter into this negotiation framework. This threshold will then be lowered to 100 million m³ for the period 2027-2028. Then only 40 million m³ from 2029.
This new approach aims to stimulate the competitiveness of the industrial sector by allowing companies to negotiate directly with suppliers. It could also attract foreign investments by providing a more flexible and transparent market environment.
Limited impact on households
It is essential to emphasize that this reform only concerns industrial customers. Households and small businesses will continue to benefit from existing subsidies. This desire to protect households from the impact of rising gas prices demonstrates particular attention paid to the fundamental needs of the Algerian population.
To implement these new thresholds, the decree specifies that managers will take into account the quantities of gas actually consumed during the previous year for already existing customers. For new clients, managers will evaluate forecasts of consumption.
the end of generalized subsidies could have considerable repercussions on the gas market, in particular by encouraging companies to optimize their consumption. By opening the door to free negotiations, the country hopes to create an environment conducive to investment and innovation in the energy sector. As Algeria seeks to diversify its economy, this reform could play a key role in achieving this goal.
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