The decree provides for a progressive lowering of the consumption threshold, concerned by the free negotiation of prices. This involves 200 million cubic meters of natural gas per year for the period 2025-2026; 100 million cubic meters of natural gas per year for the period 2027-2028 and 40 million cubic meters of natural gas per year from 2029.
The Ministry of Energy and Mines decides to put an end to generalized subsidies for natural gas prices by targeting large industrial consumers, while protecting households and small investors. This is what emerges from the decision signed by the Minister of Energy and Mines, Mohamed Arkab, published in the Official Journal No. 74, through the order dated October 13, 2024 “defining the threshold of annual quantities of natural gas consumed on the national territory from which the sale price is freely negotiated.
Algerian and foreign industrialists, whose gas consumption exceeds certain thresholds, defined by the new regulations, will have to pay higher prices from 2025, through free negotiation of prices with Sonelgaz, which will gradually revise the thresholds over five years consumption paving the way for negotiation.
“The sale price of natural gas to a customer is freely negotiated when the annual quantities consumed, on the national territory, by this customer, for its own needs are greater than or equal” to certain thresholds, specifies the Minister of Energy and mines through the new reform.
The decree thus provides for a progressive lowering of the consumption threshold, concerned by the free negotiation of prices. This involves 200 million cubic meters of natural gas per year for the period 2025-2026; 100 million cubic meters of natural gas per year for the period 2027-2028 and 40 million cubic meters of natural gas per year from 2029.
The ministry specifies: “the quantities of natural gas consumed during the year (n-1), for existing customers, are taken into consideration for the application of the defined threshold; the forecast quantities of natural gas to be consumed during year (n) or year (n+1), as the case may be, for new customers.'
The application of negotiated rates will therefore be based on the actual quantities of gas consumed during the previous year, for customers already under contract, and on the basis of forecast quantities for the year in which the commercial relationship is established, or the following year depending on the case, for new customers.
The approach, which falls within the framework of Law No. 19-13 of December 11, 2019 governing hydrocarbon activities, specifically article 146, aims to implement the revision of the policy of electricity subsidies and gas whose burden, of some 20 billion dinars, is entirely borne by the Public Treasury. The Minister of Energy and Mines has, on numerous occasions, emphasized the significant increase in the level of national consumption of natural gas, while “the national prices applied, particularly for natural gas, remain far from the real cost of production.
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