The gas pricing mechanism still needs to be sorted out

Urban combustion enterprises and industrial users under pressure

"From the summer of 2021, the domestic natural gas supply and demand pattern as a whole shows a high price and tight situation, and the city fuel enterprises basically have no opportunity to reserve low-cost gas sources, but also to assume the responsibility of guaranteeing supply, coupled with the price mechanism is not smooth, the city fuel enterprises are under great pressure." Yang Changxin said.

At present, because the price of non-resident gas has a clear ceiling and the range is limited, it is far lower than the actual increase in the cost of air intake of urban fuel enterprises, and the excess part can only be digested by urban fuel enterprises.

Yang Changxin further pointed out that the price pressure on the city fuel enterprises is large or small, but also depends on the air source structure of the enterprise. "For example, gas enterprises in Zhoushan and other places with imported LNG as the main gas source need to follow the market when purchasing incremental gas, and the operating pressure is greater."

An employee of a large gas group in Hefei said that at present, the company's natural gas cost is inverted, but it still needs to "stop one household gas and stop one party gas" according to the government's requirements. "Our main gas source is pipeline gas, and LNG is just a supplement. But now the price of pipeline gas increment contract gas is also high, the price of supplementary LNG is also high, and the current business environment has high requirements for us, and it is in urgent need of various government policy support."

Shandong, a gas industry person who did not want to be named said that at present, urban fuel enterprises are also applying to government departments to raise prices and subsidies, but the effect is not obvious.

If the pricing mechanism is successfully landed, it means that the end industrial users of natural gas should share the cost pressure of urban fuel enterprises.

"Industrial and commercial users have large gas consumption, and their gas prices should be lower than residential gas prices." However, China has long adopted a low residential gas price model and cross-subsidized industrial and commercial users through high gas prices, resulting in a price level that cannot fully reflect the actual cost borne by users, which has inhibited the price mechanism to a certain extent." The above near Zhoushan gas market said.

"The seasonal linkage mechanism of the terminal sales price of non-residential gas has basically formed, but it is mainly raised in the peak of winter gas use, and it is rarely lowered in the trough of off-season gas use." In our research and visits, we learned that industrial users' recognition of the gas price linkage policy is not high, and the phenomenon of cross-subsidies is more prominent." State Council Development Research Center resources and environmental policy Institute researcher Guo Jiaofeng said.

It is urgent to establish a reasonable cost sharing mechanism

Respondents said that at present, there is still a big gap between China's current natural gas price formation mechanism and the overall idea of "controlling the middle and letting go of both ends" in the oil and gas reform, which is still dominated by government regulation, and the market-oriented pricing mechanism needs to be further improved.

In Guo Jiaofeng's view, to improve the marketization of natural gas prices, we should first eliminate the price distortion caused by cross-subsidies to the greatest extent, rationalize the natural gas pricing mechanism as soon as possible, and establish a reasonable cost sharing mechanism. "We should actively promote the fair and open urban gas distribution network, reduce gas distribution levels, strictly regulate gas distribution prices, explore and promote the marketization of terminal sales prices, and rationalize the price mechanism as soon as possible and eliminate cross-subsidies on the basis of 'permitted costs plus reasonable benefits'."

Industry insiders suggest that for areas that do not have the conditions to cancel gate price control, the gate price formation mechanism should be improved, and the pricing mechanism should be changed from government control to linked to oil prices. For areas that have the conditions to cancel gate price control, the development of natural gas market trading centers should be accelerated, and the pricing mechanism should be changed from being linked to oil prices to "gas and gas competition."

"Reasonable price is an important lever to balance the interests of all parties, and it is the key to the healthy development of the natural gas industry, but at present, China still lacks a benchmark price for the natural gas market." The development of natural gas market trading centers, through the trading center benchmark price to replace the government pricing, is also an important path to realize the market price of natural gas." The above-mentioned employee of a large gas group in Hefei said, "At the same time, it is necessary to strengthen the supervision of natural monopoly business, promote the pilot reform of fair competition in the placement link, promote the integration of urban fuel enterprises, and improve the efficiency of their operations and services."