(Corrects in the sixth paragraph that the third tier covers any
gas use above 95 pct of the household average, not the last 5
pct of consumption)
BEIJING, March 21 China will introduce tiered
natural gas pricing for residential use, with all cities
consuming gas set to launch new pricing mechanisms by the end of
2015, a move that will help reduce excess consumption and raise
revenues for towngas firms.
The world's top energy consumer is also a huge polluter
because of its dependence on coal-fired power stations, and
authorities are seeking to raise the share of natural gas in its
energy mix to 8 percent by 2015, from around 5 percent now.
However, household gas prices have been capped at much lower
levels than those for non-residential users, which the National
Development and Reform Commission (NDRC) said has led to supply
distortions and waste.
That in turn has helped to strain domestic gas supplies and
increase the need for imports, which accounted for more than 30
percent of China's gas consumption last year.
Under the current pricing scheme, the more gas households
consume, the more subsidies they can enjoy. The NDRC said less
than 5 percent of households now consume nearly 20 percent of
the total residential gas supplies.
The NDRC, the top economic planning agency, said three
pricing bands would be introduced by the end of next year, with
the first covering 80 percent of the average monthly consumption
volumes for household users, and the second the next 15 percent.
The third tier would cover any consumption above 95 percent of
the monthly household average.
"Towngas companies will be the biggest beneficiary," said an
analyst with China's largest gas producer CNPC.
China last July raised the price that local distributors pay
for gas for non-residential use by 15 percent, the first
nationwide move to reduce losses incurred by state-owned gas
producers and importers as a result of artificially low domestic
prices. Prices for residential use were not raised at that time.
(Reporting by Judy Hua and David Stanway; Editing by Paul Tait
and Tom Hogue)