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NDRC will seek advice on the price of gas distribution

May 16th from informed sources, on the strengthening of gas price regulation to promote non residents with gas sales price reform guiding opinions of the national development and Reform Commission drafted the "(Draft)" will be released in the near future, non residents with gas prices gradually imminent release.

Analysts pointed out that the guidance (Draft) aimed at solving the "natural gas market reform," "the last mile" of the problem, the gas industry chain terminal specification. Among them, the local Gas Co after tax rate of return of 6%, the gas downstream market will be re cut interests.

Open gas price reduction model

Guiding opinions (Draft) put forward, the local price department should check the price of the independent gas distribution, and draw up the price of gas distribution which is different from the user's category. The price of gas distribution is based on the permitted cost plus reasonable profit principle, and the yield is not allowed to exceed 6% of the effective assets after tax in principle.

At the same time, the Commission encourages the conditions of the area, open to non residents with gas sales price, no longer set specific price; not have the conditions to fully open area, can be the first to release large users of gas prices, the establishment of gas price linkage mechanism to adjust the purchase and sale of non residents, to encourage large users to choose the gas source, gas distribution and sales promotion separation. And require the country to develop gas price management and pricing cost supervision rules.

Industry sources, whether the "6% yield" includes the connection fee is still unknown. If there is no connection fee, there will be little impact on the profits of Gas Co. If the connection fee is included, it means that the profits of Gas Co will shrink considerably.

A commodity Chinese researcher told the Securities Journal reporter, for Huarun gas, Beijing gas, Shaanxi, Hong Kong and China gas, gas Changchun gas, Guizhou gas and other gas industry established companies, according to the "6% return" provisions, the gas price level will have greater business interests may shrink down regulated. For new entrants to the gas industry private enterprises, "6% of the yield" regulations, will be to a certain extent to ensure enterprise income, thereby lowering the industry access threshold.

Favorable downstream terminal market

Analysts say the trend toward releasing non resident gas prices is clear. The future of the natural gas market, especially the gas pipeline Market for non residents, upstream and downstream users can achieve direct transaction. This will directly reduce the price of natural gas, and then pull the downstream end market demand.

High gas price is an important reason behind the lagging development of some natural gas market in our country, such as natural gas power generation. Only by reducing the price of power generation gas can the price of gas generation be lowered. According to the insiders, while speeding up the pace of natural gas price reform, efforts should be made to promote large-scale power users and direct docking trading upstream manufacturers, factory direct supply is the key to realize the natural gas industry to get out of the dilemma.

For the sake of environmental protection, natural gas power generation is the most potential plate for the downstream consumption of natural gas. Gas generation coal is the trend of the times. "Natural gas" 13th Five-Year "development plan" made it clear that the next step is to vigorously develop natural gas power generation industry, by 2020 natural gas power installed capacity reached 110 million kilowatts, accounting for the total installed power ratio of more than 5%. "Opinions on accelerating the utilization of natural gas" (Draft) put forward, by 2020, the total scale of natural gas power generation reached 150 million kilowatts, 100 billion cubic meters of gas power generation gas. According to estimates, the "13th Five-Year" period, natural gas power installed capacity will reach 40 million to 80 million kilowatts, an increase of between 57% to 114%.

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