Algeria Sets to Reduce Energy Consumption as Oil Earnings Slump

Algerian officials have said that the country is proposing incentives for motorists so as to double the number of cars running on natural gas by 2021 in a move to cut the consumption of expensive imported fuel in an era of edgy public finances.

Since 2014, Algeria has been struggling with a 50 percent drop in vital oil and gas revenues, which make up 60 percent of the budget and 95 percent of exports. The country has put a freeze on public hiring and development projects, banned imports of 900 items, and now desire to manage energy consumption as the country wants to save more.

Officials expect making liquefied petroleum gas (LPG) more attractive will cut the consumption of diesel and gasoline. The government is proposing to partly cover car conversions cost for drivers, a stable LPG retail price, and tax exemptions.

The head of the National Agency for the Promotion and Rationalization of the Use of Energy, Mohammed Bouzeriba said that the country plans to convert 500,000 vehicles by 2021 and 1.1 million by 2030.Out of a total of 6 million cars, only 200,000 run on gas so far.

The country is keen on tackling the consumption of energy to maintain social order. Authorities also want to reduce the consumption of electricity. Despite a 20 percent increase in the price for electricity a couple of years ago by the State utility Sonelgaz, the energy giant still needs help. Electricity demand has significantly increased in recent years as a result of infrastructure projects intended to diversify Algeria’s economy away from gas and oil.

The country has also been constructing thousands of subsidized housing units connecting them to the power grid.

Officials say the government plans to call for bids for the construction of 3 photovoltaic solar plants with a 4,000 megawatts capacity, in a move to boost power output.

The state electricity company has begun changing public lighting in some roads and towns in a new energy-efficiency initiative to save power.

Mustapha Guitouni, the Minister of Energy said at a conference that everyone must comply with rationalization, particularly in public and administrative buildings, public lighting, social housing, as well as mosques and schools.

To take the message to homes, State television has started campaigns advising people to cut consumption. It’s also promoting the use of energy-saving lamps, solar water heaters, and thermal insulation in houses.

Analysts however say making some appliances available may require further spending as the country imports most of the products it needs.

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