Chinese reforms may cut consumer gas prices

By Tang Tian 9 May 2016
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Sinopec HQ. Upcoming reforms may remove pipeline and storage infrastructure from the company. (Sinopec) Sinopec HQ. Upcoming reforms may remove pipeline and storage infrastructure from the company. (Sinopec)

End-user gas prices in China could fall by 20% after Beijing unveils the next round of pricing reforms later this year. Changes will include merging citygate prices for residential and non-residential gas, according to a top government policy researcher.

The State Council, China’s cabinet, is preparing guidelines for unifying citygate prices by hiking residential costs and cutting industrial prices until they are level, Guo Jiaofeng, an expert with the Development Research Centre of the State Council, told Interfax Natural Gas Daily.

The first part of the reforms will see citygate prices for residential gas use finally linked to provincial price benchmarks set by the central government, said Guo. This marks a shift away from the cost-plus approach that has been in use since 2009.

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