Hubei squeezes distributors to cut end-user gas bills

Hubei officials are targeting lucrative margins in the city gas distribution business as they look to reduce gas bills to drive demand growth Hubei officials are targeting lucrative margins in the city gas distribution business as they look to reduce gas bills to drive demand growth.
By Li Xin 15 March 2017 0 25048
Sinopec’s Lichuan gas processing plant in Hubei province. The region hopes to lower gas bills for end-users. (Interfax)

Authorities in the Chinese province of Hubei have proposed capping the net return on investments in city gas distribution at 6% to lower gas bills for end-users, at the expense of city gas distributors.

Hubei will allow a net return of 8% on investments in pipelines that use at least 75% of their capacity, according to trial regulations released by the Hubei provincial price bureau after a public consultation period for a draft version ended last month.

The 8% margin is in line with