China trims non-residential natural gas prices

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China, the world's third-largest natural gas consumer, will trim non-residential city-gate natural gas prices starting from Friday, its first price cut since late 2015, after earlier government measures to cut transportation costs, the state planner said on Wednesday.

The price will be cut by 0.1 yuan (0.0152 US dollars) per cubic meter, the National Development and Reform Commission (NDRC) announced.

The lower prices would boost the use of cleaner natural gas to promote an adjustment of the country’s energy mix towards cleaner fuels and protect the environment.

The National Development and Reform Commission in Beijing /VCG Photo

The move will result in 7 billion yuan of savings in operating costs annually for industrial users, power generation companies, central heating suppliers, taxi drivers, commercial entities, service providers and others downstream who buy at government-fixed prices, said the NDRC.

"The NDRC has in the first half of this year ...cut transportation cost after evaluating the cost for cross-provincial pipelines...which gives room for lowering the city-gate prices," the state planner said.

Non-residential users make up around 80% of China's total gas consumption, and the price cut is expected to save all non-residential natural gas users 16 billion yuan as its influence will extend to market prices, said the NDRC.

The price cut will reduce corporate costs and boost supply-side structural reform, said Jing Chunmei, a researcher at China Center for International Economic Exchanges.

The price cut will also encourage clean energy use and improve the energy mix to strengthen environmental protection, Jing added.

Source(s): Reuters ,Xinhua News Agency