BEIJING, Sep. 7, 2010 (Xinhua News Agency) -- Jiangsu province in East China hiked t he gas price for automobiles and will raise the gas for residential us e following a local tribunal hearing.
Before the price hike in Jiangsu, provinces or regions such as Sich uan, Chongqing, Hubei, Jiangxi, Anhui, Zhejiang and Shanghai all raise d their natural gas price.
The nationwide gas price hike reflects the rising cost of supplying
gas.
In June, the National Development and Reform Commission (NDRC), Chi na's top economic planner, raised the benchmark factory price by 0.23 yuan/cubic meter.
In late August, Sinopec's (NYSE:SNP) (SNP.NYSE; 00386.HK; 600028.SH) Sichuan-t o-East natural gas pipeline has been put into commercial operation. Th e producer price of gas supplied by the Sichuan-to-East pipeline is 0. 792 yuan (for fertilizer makers and non-industrial towngas) or 0.352 y uan (for direct customer and industrial towngas) per cubic meter highe r than that by PetroChina's (PTR.NYSE; 00857.HK; 601857.SH) West-to-Ea st pipeline that pumps gas from Xinjiang also to Shanghai. This is reg arded as the direct reason for many East China provinces to raise the gas selling price.
Zhejiang province raised its gas price in mid-July and the provinci al government then judged that its cost in purchasing natural gas woul d rapidly rise, due to the fact that Zhejiang will see its gas supplie s from Sichuan-to-East pipeline increase from 2 million cubic meters t o 5 million cubic meters. However, the producer price of the Sichuan-t o-East pipeline is 0.792 yuan/cubic meter higher for fertilizer makers
and non-industrial towngas and 0.352 yuan/cubic meter higher for dire ct customer and industrial towngas than gas provided by PetroChina's ( PTR.NYSE; 00857.HK; 601857.SH) West-to-East pipeline, which pumps gas from Xinjiang also to Shanghai.
China's natural gas pricing mechanism is expected to be reformed th is year. The NDRC's move to raise the domestic onshore natural gas pro ducer benchmark price in June is regarded as a prelude to reform of th e natural gas pricing mechanism, with the possible result of a 10 to 2 0 percent gas price increase over current levels. (Edited by Lin Fanji ng, linfanjing@xinhua.org)
