Beijing raises non-residential use pipeline gas prices for Nov 19-March 15

Beijing will raise the price of most pipeline natural gas sold for non-residential use by Yuan 0.43/cu m during this winter from Nov. 19, 2023, to March 15, 2024, the Beijing Municipal Development and Reform Commission said Nov. 28.

The selling price of pipeline gas for residential users and a few non-residential ones such as schools, elder care, welfare institutions and community centers that purchase at the discounted residential gas rates would remain unchanged during this period, according to the notice.

The announced hike is based on the city's natural gas price adjustment mechanism and is in line with the same period last year, the notice said. Beijing also required all gas companies to strictly implement the price changes and ensure smooth gas supply.

Market participants said the move is aimed at discouraging gas demand from non-residential users to ensure sufficient and stable supply for residential users in Beijing during the winter heating season.

Beijing kicked off its central heating supply a week earlier than the usual start date this year due to a cold snap in early November.

Large-scale centralized district heating in most parts of northern China normally starts around Nov. 15 and lasts until March 15. However, heating in some northernmost cities starts earlier around mid-October. The heating season in a few regions can last longer and local authorities decide when to begin centralized district heating, based on the weather.

China's oil and gas companies sell natural gas to city-gas distributors or big industrial users and power plant operators at differentiated rates depending on the source of the gas.

The prices of imported LNG, offshore natural gas, unconventional gas, imported pipeline gas from projects launched after 2015, and city-gate gas prices in a few provinces are not regulated. The prices of onshore natural gas and imported pipeline gas from projects before 2015 are still regulated.

Gas sales further downstream by city-gas distributors to end-users are mostly regulated, especially for residential use. Local development and reform commissions are responsible for setting the guideline prices for pipeline gas that are then sold to different users in the local market.