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China lowers incremental gas price to merge city gate prices

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02 March 2015

China lowers incremental gas price to merge city gate prices

Report summary

On Feb 28 the NDRC announced that incremental and existing city gate gas prices will be merged. Although we were anticipating a decision on gas pricing, the scale of the decrease of around 15% in the incremental prices is not commensurate with the fall in oil prices, despite city gate prices ostensibly being linked to a basket of LPG/Fuel Oil. China’s government is trying to balance stimulating demand against continuing to encourage investment, however we expect limited upside to demand in 2015.

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