Yaoundé - 02 October 2023 -

Industrial gas prices: GDC maintains price increase despite ministerial order

Industrial gas prices: GDC maintains price increase despite ministerial order
  • Comments   -   Friday, 21 July 2023 13:23

(Business in Cameroon) - Gas supplier Gaz du Cameroun (GDC) sent, Monday (July 17), its June 2023 invoice to the industrial companies it supplies in Douala. The invoices show a 20% increase in the gas tariff, in line with the decision taken by the gas supplier to up its tariff, effective from June 1, 2023.  

"We understand that you may have concerns about the price adjustment. Therefore, we invite you to address correspondence to GDC by July 21, 2023, indicating your days of availability and proposed times for an appointment, if you have any questions regarding the said invoice. As previously mentioned, the price adjustment was a difficult decision and we are aware that this change may affect some of our valued customers," writes Eric Friend, GDC's Managing Director, in the letter sent with the invoices.  

By sending its customers in the Douala-Bassa industrial zone invoices incorporating a 20% price increase, GDC is defying instructions issued by the Cameroonian government. On July 13, 2023, just four days before the aforementioned invoices were sent, the Minister of Commerce, Luc Magloire Mbarga Atangana, held a consultation meeting with GDC clients and the supplier. The meeting ended with the government rejecting the proposed tariff increase because the decision was not compliant with the rules governing the practice in the domestic market. 

Minister Mbarga Atangana was fiercely opposed to the price increase since the announcement of GDC’s decision, on May 15, 2023. In at least two letters -accessed by Business in Cameroon, he has informed GDC executives that per the 2019 Petroleum Code and its implementing decree signed on May 4, 2023, "the price of natural gas sold on the domestic market is subject to the price approval procedures.” This procedure requires prior analysis of the proposed price increase by the Ministry of Commerce, which will approve, adjust or outrightly reject the plan.  

A show of strength? 

At the July 13, 2023, consultation meeting in Yaoundé, Gaz du Cameroun’s executives indicated that the company is not subjected to the 2019 Petroleum Code but by the provisions of the investment agreement it signed with the State of Cameroon in 2009. 

In response to that argument, the Minister of Commerce cited a provision of the said investment agreement that requires GDC to negotiate any pricing plan with the State, through notably the National Hydrocarbons Corporation (SNH) and the Ministry of Mines, before implementing them in the domestic market.  

Based on that provision, Minister Mbarga Atangana suspended GDC's decision to raise its industrial tariffs and invited the company to comply with the regulations in force. The company either had the choice of respecting the provisions of the 2019 Petroleum Code or complying with the pricing provision contained in the investment agreement signed in 2009. Unfortunately, the June 2023 invoices show it is yet to consider that suspension, intensifying its dispute with the State and its clients over that price increase. 

Brice R. Mbodiam

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