The National Oil and Gas Authority of Bahrain (NOGA) is to raise the price of gas supplied to Aluminium Bahrain (Alba) by $0.75 per million British thermal units (mmbtu) to $2.25/mmbtu from January 1, 2012, Alba said on Wednesday.
Many energy intensive industries in the Middle East have thrived on huge gas price subsidies that industry observers say should be phased out to encourage investment in regional gas exploration and discourage waste.
"If the notified price increase takes effect, Alba expects that it would result in an increase of approximately $85 million in Alba's cost of sales for the year 2012 based on its expected production level," Alba said in a statement.
Alba currently pays just $1.50/mmbtu for gas it uses to produce more than 870,000 metric tonnes a year of high grade aluminium, a fraction of the cost paid by competitors in other parts of the world.
Aluminium Bahrain said it expected costs to rise by $85m as a result of planned gas price rises.
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