Plans to increase domestic gas price: Biya to intervene as trade ministry, Gaz du Cameroun in deadlock.

Gaz du Cameroun had written to the Minister of Trade, Luc Magloire Atanga, at the start of the current fiscal year, stating that they wanted to increase domestic gas prices by 20%, in order to enable the company meet up with what it described as astronomical rise in costs of production.

The member of government had refused to okay the move which has continued to drag on. We gathered that the minister boss has finally decided to forward the matter to the President of the Republic for final arbitration.

In a letter reportedly sent to the management of GDC August 29, the Minister of Trade assured the gas suppliers that the matter has been referred for the decision of the high command and that until the Head of State issues a final decision, nothing can be done because it will be deliberately violating the relevant texts and rules in place.

Inside sources in the Ministry of Trade hinted that the minister’s letter was first sent to the Minister of State, Secretary General at the Presidency of the Republic, Ferdinand Ngoh Ngoh. 

However, in addition to requesting arbitration from the Head of State, Luc Magloire Mbarga Atangana’s letter to the CEO of GDC once again reiterates his opposition to the unilateral increase in the price of industrial gas supplied by Gaz du Cameroun to some thirty industrial companies in Douala. 

“I was informed of your supply suspension notice, to take effect September 1, 2023, for industrial natural gas consumers should they fail to pay the supplementary invoices issued by you, raising your prices by 20%. In this respect, I have the honor of reminding you of my letters (...) of May 30 and June 14, 2023, inviting you to fully comply with enforceable texts and consequently asking you to postpone any unilateral and uncoordinated measures to increase prices,” the government missive stated. 

It is worth recalling that, since the letter of 15 May, 2023, in which GDC announced a 20% increase in its tariffs, which was supposed to take effect on June 1, 2023, the Minister of Trade has been accusing GDC of non-compliance with enforceable regulations concerning industrial gas prices in the domestic market. 

To support that argument, the government official initially invoked the provisions of Decree no. 2023/232 of May 4, 2023, outlining guidelines for the implementation of Law no. 2019/008 of April 25, 2019, on the Petroleum Code.

The decree effectively subjects an increase in the price of natural gas distributed in the domestic market to a prior approval process. 

That process requires economic operators wishing to increase the price of their goods to first submit the decision to the government along with all the documentation supporting their proposed decision. 

Depending on the circumstances, the government may simply reject the decision, approve it, or decide on a “fairer” price increase. 

During a consultation meeting held on July 13, 2023, in Yaounde, the gas company's executives disputed the argument, informing that the company was not subject to the provisions of the 2019 Petroleum Code and its 2023 implementing decree. 

They said they were instead bound by the provisions of the investment agreement signed in 2009 with the Republic of Cameroon. To counter that claim, Minister Atangana pointed at a provision of the said investment agreement between GDC and the Republic of Cameroon. 

That provision requires the company to negotiate any pricing decision with the government, through the National Hydrocarbons Corporation, SNH and the Ministry of Mines, before implementing it in the domestic market.  

If the 20% increase in the prices of domestic gas was to be finally approved, it means households will hence be paying 7,800 FCFA for a 12kg bottle of gas instead of 6,500 FCFA which is the current price.