Natural gas prices will not rise significantly in the near future but there is still a trend of higher prices

Industry insiders believe that natural gas prices in China will not rise significantly in the near future due to the fact that currently implemented stable natural gas pricing policies for sub-users are very much in line with China's national conditions.

It is understood that the sub-user pricing of natural gas policy makes China's natural gas prices more complex, fertilizer companies and residents use cheaper gas, commercial and vehicle use more expensive, near the gas source area price is lower than the gas source area. Recently, the relevant state agencies have considered several times the reform of the natural gas pricing mechanism. There are four major reforms: First, cancel the difference between the planned and foreign prices, combine the natural gas wellhead price and the decontamination fee into the ex-factory price, implement a single user, single settlement price, Supply and demand sides use economic contracts to determine the supply and demand quantity; second is to break the pattern that gas prices will remain unchanged for a few years, under the supervision of the state, according to market changes timely adjustment; third is to determine the pipeline transmission price of different lines; fourth is to allow the supply and demand sides according to the market The situation is within a certain range of floating prices.

However, after several discussions, the relevant government departments believe that the current sub-user pricing natural gas policy is still very much in line with China's national conditions, and reform of the natural gas pricing mechanism is not easy to carry out prematurely. There are two reasons for this: Firstly, the natural gas policy that is subdivided by users complies with the guidelines and policies for supporting agriculture and supporting agriculture that have been emphasized by the State Council for many times, and it also reflects the government's preference for the use of gas by the general public. If the reform will affect the income of farmers and the consumption of residents, Involving a wide range of people and the public have great opinions. Secondly, the cost of natural gas transportation is relatively high, and the construction of the terminal pipe network needs the support of the vast majority of consumers. The gas price of the gas source is different from the basic law of the market economy.

The industry believes that although the NDRC will not raise the price of natural gas in the near future, in terms of the long-term trend of energy shortage in China, it will adopt the method of sub-users to slowly increase the price of natural gas to increase the long-term gas price as a whole.

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