China’s state planner, the National Development and Reform Commission (NDRC), issued guidelines on June 22 over pricing mechanisms for city natural gas distribution, a move analysts say aims to reduce mid-stream costs in order to increase use of cleaner-burning fuel.
Supervision of city gas distribution in China has been lagging, leading to huge price differences across cities. Experts believe distribution prices in some cities are too high and that is not good for gas development.
The guidelines will establish a cost constraint mechanism to set upper limits on core indicators that will affect distribution prices, according to experts. This is part of an effort to help companies enhance cost management and improve their operation efficiency.