China to Raise Natural Gas Price by 10-20 Percent in Third Quarter

Strategic Insights -

China's Vice-Minister of National Development and Reform Commission, Xie Zhenhua, announced that the country is likely to raise natural gas prices by 10-20 percent during the third quarter. The price hike will be implemented gradually across different regions, taking into account the financial capacity of residents. This move comes as China prepares to reform its natural gas pricing mechanism, which has been hindered by rising consumer prices. The country's natural gas producers, including PetroChina, have long advocated for a price hike to reflect the international market rate.

Key Takeaways:

  • China's natural gas price is expected to increase by 10-20 percent in the third quarter, according to Xie Zhenhua.
  • The price hike will be implemented gradually across different regions, with consideration for residents' financial capacity.
  • China's natural gas pricing mechanism is being reformed, with an aim to reflect international market rates.
  • PetroChina, China's largest gas producer, is expected to be impacted by the resources tax implemented in northwest China's Xinjiang Uygur Autonomous Region.
  • China's natural gas supply shortage may reach 30 billion cubic meters this year, according to Liang Zuojian, deputy secretary general of the China Towngas Association.
  • Wuxi city, in east China's Jiangsu province, has already hiked its LNG selling price from 3.7 yuan to 3.9 yuan per cubic meter.
  • The price hike is expected to be a gradual process, with pipeline transportation fees already raised by 0.08 yuan per cubic meter in scores of provinces.

Statistics:

  • China's natural gas price is expected to increase by 10-20 percent in the third quarter.
  • The price hike will be implemented gradually across different regions.
  • China's natural gas supply shortage is expected to reach 30 billion cubic meters this year.
  • Pipeline transportation fees in scores of provinces were raised by 0.08 yuan per cubic meter in April.
  • Wuxi city's LNG selling price was hiked from 3.7 yuan to 3.9 yuan per cubic meter in May.
  • China's natural gas producers have long advocated for a price hike to reflect international market rates.

Sources:

  • China's Vice-Minister of National Development and Reform Commission, Xie Zhenhua, as quoted at China Energy Summit.
  • China Towngas Association, as cited by Liang Zuojian, deputy secretary general.
  • Asia Pulse, "China to Raise Natural Gas Price by 10-20 Percent in Third Quarter."
  • Petroleum Industry Communications (XIC), "China's natural gas supply may reach 30 billion cubic meters."