China Introduces Simplified Regional Pricing System for Natural Gas Transportation

(Reuters) — China will simplify freight rates on its natural gas pipeline network by introducing a "one area, one price" system across four broad areas of the country, according to a document released by the state planner on Tuesday.

The reform replaces a system of 20 different inter-provincial natural gas freight rates with one rate for each of the country's northwest, northeast, central east and southwest regions, the notice from the National Development and Reform Commission (NDRC) said. The move is designed to establish a unified freight structure and prevent segmentation of the pipeline system due to having too many different freight rates, the NDRC said.

The value-added tax inclusive freight rate for the northwest region and northeast region will be 0.1262 yuan ($0.02) and 0.1828 yuan, respectively, per thousand cubic meters per kilometer.

Rates for the central eastern and southwest regions will be higher, at 0.2783 yuan and 0.3411 yuan, respectively, per thousand cubic meters per kilometer.

The new pricing system will take effect from Jan. 1, 2024.

($1 = 7.1441 Chinese yuan)

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