PetroChina Said to Mull Raising Gas Prices as NDRC Urges SupplyBy
May raise gas price by 10% to 20% from as early as Nov.20
Country’s economic planner asks producers to increase supply
PetroChina Co. is considering raising non-residential natural gas prices, while China’s top economic planner has urged major suppliers to raise output, as the country seeks to avoid shortages during the peak winter season.
The country’s biggest gas producer and distributor plans to boost prices for industrial and commercial users from as soon as Nov. 20, the earliest possible date it’s allowed to under regulations issued by the National Development and Reform Commission, according to people with knowledge of the plan. PetroChina plans to raise prices by between 10 percent and 20 percent, the people said, asking not to be named as the information isn’t public.
Separately on Thursday, the NDRC called on China’s major natural gas producers, including China National Petroleum Corp., China Petrochemical Corp. and China National Offshore Oil Corp., to increase output to alleviate tight supplies in the north and northwest regions, according to a statement published on its website. CNPC is PetroChina’s state-owned parent.
Winter shortages have become a concern in northern China, where the government has been encouraging the use of gas instead of coal for heating to reduce pollution, according to Laban Yu, head of Asia oil and gas equities at Jefferies Group LLC in Hong Kong.
“The price hike can help alleviate the gas supply situation a bit for the peak season by limiting some industrial gas consumption,” Yu said. “The price hike will help PetroChina’s gas margin in the short term, but it will be hard to keep prices high when the weather turns warmer.”
PetroChina’s planned price increase is partially designed to alleviate gas shortages in the northern provinces, where PetroChina expects to see tight supplies because of high winter-heating demand, said the people. The company didn’t respond to requests for comment.
China’s natural-gas imports surged to a record last month. China imported 5.73 million metric tons of the fuel in September, the General Administration of Customs said earlier this month. That’s up more than 70 percent from both August and the same month last year.
Northern China experienced the lowest temperatures in 64 years last year and Beijing officials ordered offices to cut heating to as low as 14 degrees Celsius (57 degrees Fahrenheit) in response to a natural-gas shortage.