China will cut the price of natural gas for non-residential users to ease the burden on downstream industry players.

 

中国将降低非居民用户的天然气价格以减轻下游企业经营者的负担。

 

From Friday, the benchmark price at urban natural gas stations for non-residential use will be cut by 100 yuan (about 15.12 U.S. dollars) per thousand cubic meters, the National Development and Reform Commission (NDRC) announced Wednesday.

 

The move will result in 7 billion yuan of savings¹ in operating costs annually² for industrial users, power generation companies, central heating suppliers, taxi drivers, commercial entities³, service providers and others downstream who buy at government-fixed prices, said the NDRC.

 

According to the NDRC, the price cut results from lower costs of gas pipeline⁴ transmission and adjusted value added tax rate for natural gas.

 

Non-residential use takes 80 percent of China's natural gas consumption. The price cut is expected to save all non-residential natural gas users 16 billion yuan as its influence will extend to market prices.

 

The price cut will reduce corporate⁵ costs and boost supply-side structural⁶ reform, said Jing Chunmei, 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, she said.

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