China, the world’s largest energy consumer, is cutting domestic gas prices to help boost demand for LNG and pipeline supplies.
From Friday, benchmark city-gate prices for non-residential users will be cut by 700 yuan (about US$110) per thousand cubic meters, the National Development and Reform Commission (NDRC) said in a statement on its website.
The agency also said it would allow industry players to raise gas prices by up to 20 percent above the benchmark from November 20 next year.
The move will cut costs for downstream industry players, promote fair market competition and stimulate the economy, according to the NDRC.
China’s LNG importers have been struggling this year due to the country’s weak demand for the fuel amid an economic slowdown.
High LNG inventories and low demand prompted China’s CNOOC recently to sell some long-term volumes from Queensland Curtis LNG project in Australia onto the spot market.
It is yet to be seen how this move to cut gas prices will overall affect China’s LNG imports and demand as many LNG players are putting their hopes on future demand for the fuel in the world’s biggest energy consumer.
LNG World News Staff