Ministry of Energy and Mineral Resources Regulation on Natural Gas Utilization for Transportation

Ministry of Energy and Mineral Resources Regulation No. 19 of 2010 on Natural Gas Utilization for Transportation (‘Regulation’) has been issued to accelerate the utilization of natural gas as a fuel in transportation. This is being done with the aim of making natural gas an alternative fuel for transportation, so as to reduce the use of oil.

As listed in Article 2, the Regulation covers the obligations under cooperation contracts; the natural gas allocation plan for fuel; and fuel specification.

Parties to cooperation contracts, pursuant to Article 3, are obliged to allocate 40% to the domestic market obligation.

Downstream businesses, pursuant to Article 4, are obliged to allocate 25% of their commercial natural gas to fulfil the needs of fuel for transportation. This allocation, however, will be phased in gradually, starting from 10% in 2011-2014, 15% in 2015-2019, 20% in 2020-2024, and 25% from 2025.

Natural gas for transportation can be in the form of compressed natural gas (“CNG”) or liquefied vehicle gas, as elaborated on in Article 5 (3).

Article 6 sets out a pricing formula for natural gas utilized for transportation, with the Minister being responsible for determining the price for each region.

The Regulation has been in force since 13 December 2010.