Industrial demand for natural gas in Cameroon’s economic capital Douala collapsed in 2024, as rising prices, regulatory disputes and supply disruptions pushed manufacturers to abandon the fuel in favour of alternatives, official data showed.
Deliveries by Gaz du Cameroun (GDC) to industrial clients dropped to 35.57 million cubic metres in 2024, a fall of nearly 63 percent compared with the previous year, according to figures from the state-owned National Hydrocarbons Company (SNH).
The sharp decline reflects both the disconnection of several industrial users from the gas network and maintenance work on infrastructure, but industry sources say deeper structural pressures are at play.
The downturn follows a steep increase in energy costs that has strained manufacturers already grappling with inflation and rising input prices.
In May 2023, GDC — a subsidiary of UK-based Victoria Oil & Gas — announced a 20 percent increase in gas tariffs, effective June 1, citing higher operating costs. The decision coincided with a series of broader cost increases across the energy sector.
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Cameroon’s 2023 finance law introduced a special tax on natural gas of 70 CFA francs ($0.11) per cubic metre, while electricity tariffs for large industrial users rose by about 30 percent. Fuel prices also increased by between 15.8 percent and 36.5 percent, further squeezing production margins.
The gas price hike quickly triggered a dispute with the government, exposing tensions over pricing authority in the sector.
In a letter dated May 30, 2023, Trade Minister Luc Magloire Mbarga Atangana reminded GDC that any revision of domestic gas prices requires prior government approval, citing provisions of the decree implementing the 2019 Petroleum Code.
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He instructed the company to suspend the increase and submit supporting documentation for review.
GDC, however, proceeded with the adjustment, arguing that rising operational costs left it with little choice. The move drew strong resistance from industrial clients, who questioned both the legality of the increase and its alignment with existing contracts.
In correspondence dated June 6, 2023, GDC chief executive Eric Friend acknowledged client objections but confirmed the company would maintain the new pricing structure.
The dispute escalated to senior levels of government, with the trade ministry indicating in August 2023 that the matter had been referred to the country’s highest authority for arbitration.
While the regulatory standoff remains unresolved, its impact on demand has been immediate.
Industry operators say a combination of higher prices and unreliable supply has driven many companies to switch energy sources, accelerating a shift away from pipeline gas.
“At one point, prices went up, and then there were production issues,” said one sector source, speaking on condition of anonymity. “Companies had to look for more reliable options.”
Many industrial users have since turned to diesel and liquefied petroleum gas (LPG), which, despite their own price volatility, offer greater flexibility and fewer supply interruptions.
Energy distributors including Tradex and Aza Afrigaz have moved to capture this demand, expanding services tailored to industrial clients seeking alternatives to pipeline gas.
The collapse in gas deliveries underscores a broader transformation of Douala’s industrial energy landscape, as firms diversify supply sources to mitigate risk and control costs.
For GDC, the challenge now extends beyond restoring lost volumes. The company must also rebuild confidence among industrial customers who have already adapted their operations to function without its supply.
Analysts say regaining market share will depend not only on pricing but also on reliability and regulatory clarity.
“The market has changed,” said an energy consultant based in Central Africa. “Once clients switch and invest in alternatives, it becomes much harder to bring them back.”
With industrial demand weakened and competition intensifying, Cameroon’s gas sector faces a critical test of its ability to remain competitive in an increasingly diversified energy market.
