Determination of Natural-Gas Prices for Certain Industrial Sectors

Presidential Regulation No. 40 of 2016 on the Determination of Natural-Gas Prices (“2016 Regulation”) has just been issued.The 2016 Regulation is aiming to boost national economic development through the efficient utilization of gas by industry and businesses. With this goal in mind, the 2016 Regulation grants authority to the Minister of Energy and Mineral Resources (“Minister”) to set the price of natural gas in special circumstances which are only applicable to certain business sectors.This Regulation is of particular relevance to producers of natural gas, as well as to industries which utilize natural gas.Natural-Gas PriceIn general, the Minister possesses the authority to set a gas price which is applicable across all business sectors. This price should take into consideration: 1) the current national economic situation; 2) current national and global gas prices; 3) domestic purchasing power; and 4) domestic gas utilization added value. [1] However, under the 2016 Regulation, the Minister is now also authorized to set a specific natural gas price (“Specific Natural Gas Price”) for certain business sectors, if both of the following conditions are met: [2]