China Reforms Natural Gas Prices

In a pilot scheme, China will link city-gate natural gas prices with prices of imported fuel oil and liquefied petroleum gas (LPG), instead of a systems based on domestic gas production costs.

With this step, it becomes easier for gas firms to pass on expensive imports to end-users.

Initially, the scheme will put in place in Guangdong province and Guangxi region.

The government used imported fuel oil and LPG prices in Shanghai as a starting point to derive city-gate prices for Guangdong and Guangxi.

The city-gate prices will be adjusted annually, and prices will later be adjusted once in six months and once in a quarter.