Imported Gas’s Sales Price Increased

On November 23, 2018, Ministry of Finance, General Administration of Customs and State Administration of Taxation jointly issued the Notice of Issues Concerning Adjusting the Preferential Tax Policies for Natural Gas Imports (abbr. as the Notice). According to the Notice, the sales price of LNG was adjusted to RMB 28.06/GJ (1GJ=1 billion Joule), and the sales price of piped gas was adjusted to RMB 0.99/cbm. Both the sales price of LNG and of piped gas increased by 2.1%. From April to June, the sales price of LNG was RMB 27.35/GJ, and the sales price of piped gas was RMB 0.97/cbm.

This was China’ fifth time to adjust the preferential tax policies for natural gas import and natural gas’s sales price (the past four adjustments were in 2011, 2013, 2015 and 2017). China became a net importer of natural gas in 2007, and its gas import dependence degree increased to 38.85% at the end of 2017. Usually, winter is the peak season of gas demand. Entering the heating season in the northern part of China, the consumption volume of residential gas jumped. Besides, in order to control the air pollution, many provinces and cities started the coal-to-gas reform, pushing up the gas demand. Thus, the preferential tax policies published this time could encourage related enterprises to import more gas to ease the tight supply in the heating season.