Omani cement firms hit by gas price rise

Companies hit hard by Ministry's plan to double gas supply prices from 1 January

NEWS, Business

Oman's two main listed cement manufacturers have reported that costs are likely to increase substantially following a decision by the Sultanate's Ministry of Oil & Gas to double gas prices.

The ministry has recently announced that it will double gas prices from $1.50 per million metric british thermal units (MMBTU) to $3.00 - effective from January 1. It also plans to conntinue increasing rates by at least 3% in subsequent years in a bid to cut costly fuel subsidies.

In statements to the Muscat Securities Market (MSM), Oman Cement's CEO Jamal Shamis Al Hooti said its costs are likely to increase by around $17.2mn (OR6.6mn) a year.

Raysut Cement's CEO Eng.Salem Alawi Mohamed Baboud, meanwhile, argued that its costs were likely to increase by $11.7mn (OR4.5mn) a year.

Al Hooti said that the company had "made a representation to the Government in this regard for a reconsideration of the decision".

In the meantime, he added that it planned to cut overheads by improving productivity and cost controls, as well as restructuring prices.

 

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