Oman weighing domestic gas pricing reform: IGC

Oman’s natural gas sector is undergoing a period of transformation as policymakers and industry stakeholders seek to balance rising domestic demand, industrial growth and energy transition objectives, according to Abdulrahman al Yahyaei, CEO of Integrated Gas Company (IGC), the Sultanate of Oman’s sole aggregator and shipper of natural gas.

Commenting on the evolving dynamics of the domestic gas market, Al Yahyaei indicated that growing pressure on gas resources is prompting a broader reassessment of how natural gas is valued, allocated and utilised across the economy.

One area attracting increasing attention is domestic gas pricing. With international gas prices having risen significantly in recent years amid geopolitical tensions and changing energy market fundamentals, Oman is also evaluating how pricing mechanisms can better support efficiency and economic value creation.

“Domestic gas pricing is an important policy question,” Al Yahyaei said. “Global gas prices and opportunity costs have changed significantly, and this creates a need to ensure that domestic pricing encourages efficiency, reflects economic value, and supports responsible consumption.”

At the same time, he stressed that pricing reforms must preserve Oman’s attractiveness as an investment destination for strategic industries. “The direction is toward more disciplined, transparent and value-based pricing rather than blanket subsidies,” he added.

The changing market environment is also encouraging industrial consumers to adopt measures aimed at reducing dependence on natural gas. According to Al Yahyaei, interest is growing in energy-efficiency initiatives, electrification, renewable energy integration and lower-carbon production pathways.

“We are seeing increasing interest from industrial customers in energy efficiency, electrification, renewable integration and lower-carbon production models,” he noted. Some companies are also exploring hydrogen, renewable electricity and process optimisation strategies to improve competitiveness and align with international sustainability requirements.




Source: Oman Observer