China slashes natural gas prices by 30%

LNG exporters will welcome the return of a major buyer, while domestic producers will be less happy with the change.

City-gate gas prices for non-residential users will fall from $11.55/m British thermal unit (Btu) (yuan 2.51/m³) to $8/m Btu from 20 November, according to the National Development and Reform Commission (NDRC), China’s top economic planner. China will also improve the market mechanism by allowing buyers and sellers to negotiate prices within a 20% range of the base price. But for the first year only downward revisions will be allowed. This flexibility could result in overall cuts as large as 50%, said Neil Beveridge, an Asian-focused gas specialist at research house Bernstein. The NDRC also plans to improve the transparency of non-residential gas prices by encouraging sellers and buyers to u