A number of Malian government agencies have devised a plan to counter the country’s perennial butane gas crisis. The first step is to offset part of the government subsidy arrears from 2019 by using 2020 credit. The next phase is to fix the gas import quota at 15,000 tons per year for an estimated consumption of 17,000 tons per year.
This plan has done little to assuage the concerns of gas industry executives or Malians impacted by gas shortages. At best, this strategy puts off this issue until next year and makes it even more difficult for gas companies to manage their finances once the quota is met and the subsidies for the year are paid out, which will not cover all of their operating costs.
An alternative that has found success in neighboring countries and is encouraged by the Malian gas sector is the creation of a general gas fund. Such a fund would give the state better bargaining power for gas prices while also promoting a more climate-friendly energy policy.
If Mali does not choose this option, it would be forced to let distributors sell gas at market value, without subsidies, in three-kilogram increments instead of the current six. Since November 2019, the professional organization of gas operators has ceased all activity after sending a letter to Mali’s minister of commerce and industry. Chief among their concerns is the lack of delivery for a slate of subsidies valued at about US$11.8 million.