China's Provincial Gas Distribution Reform Far behind Schedule

According to China’s top economic planning authority NDRC’s planning, China’s provincial piped gas transmission and distribution institutional reform shall be accomplished by the end of 2018. Herein, the cost review and pricing regulation shall be finished before the end of June. However, as the time comes to May, over a half of all 32 province-level administrative regions (23 provinces, 5 autonomous regions & 4 municipalities, hereinafter short for province) are behind the schedule. Only 12 provinces have issued the provincial piped gas transmission pricing management and cost review regulations, or city gas pricing management and cost review regulations, while four provinces are still at the stage for public advices and suggestions.

Hubei Province is the first region which has issued both of the provincial piped gas pricing management regulation and cost review regulation, and Fujian, Shaanxi, Jiangxi and Shandong have also issued both of the two regulations. Jiangsu, Zhejiang and Hebei have issued the provincial piped gas pricing management regulations. Henan, Heilongjiang, Hubei and Chongqing have issued the city gas pricing management regulations. Guangdong, Hainan, Yunnan and Guangxi are gathering advice for the regulations, and no formal regulation has been issued yet.

China has paid great attention to the natural gas pricing mechanism reform for many years, and the progress is far behind schedule and expectation. The current coal-to-gas reform and environmental production supervision are crucial stimuli to the consumption of the natural gas, however, the supply and distribution system of the piped gas is still not capable to catch up with the pace of consumption growth. Moreover, not only the pricing reform, but also the other institutional reforms, such as the national pipeline corporation initiative and third-party admittance reform, are also facing tremendous tasks and have a long and arduous way to go.