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China plans up to 30% cut in natural gas prices

Gas storage tanks are seen at the construction site of Beijing Jingxi Gas-fired Thermal Power Co Ltd, which will be used to replace the old coal-fired power plants, in Beijing in this on Oct 25, 2013 file photograph.

[SHANGHAI] China plans to cut city-gate non-residential natural gas prices by up to 30 per cent in some provinces at the end of October, the Securities Times reported on Tuesday, citing sources.

Flagging growth in natural gas demand has hurt Beijing's efforts to replace coal, a major source of smog and greenhouse gas emissions.

Demand has risen just 3 per cent this year versus double-digit increases between 2000-2013, with experts blaming Beijing's inflexible pricing policy.

The cuts in the non-residential city-gate rate for each province would differ, said the sources, adding that the price setting method will also be reformed in order to become more market-orientated.

Market voices on:

"For provinces which currently have a low city-gate rate the price could fall by 0.4 to 0.5 yuan per cubic metre, for provinces with a higher city-gate rate it could fall by 0.7 to 0.8 yuan per cubic metre," the newspaper quoted the source as saying, meaning cuts of between 20 to 30 per cent.

On April 1, city-gate prices for new non-residential users were cut by 0.440 yuan (S$0.098) per cubic metre.