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| Rise of Liquefied Natural Gas Price Discouraged |
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While consumers are happy, many wholesalers and retailers of bottled liquefied natural gas (LNG) in south China's Guangdong Province seem reluctant to carry out the recent measures of the provincial price bureau to keep the LNG price from rising further. Following a series of measures to interrupt the bottled LNG price rise late last month, the Guangdong Price Bureau announced further steps on last Friday to control the price. According to these latest measures, the maximum price gap between LNG importers or refineries and direct end-consumers can be no more than 7 percent of the total price; between importers and wholesalers, no more than 2 percent; between wholesalers and retailers, no more than 1.5 percent; and between retailers and end-consumers, no more than 4 percent. The measures allow for no extra charges on bottled LNG deliveries except for those already acknowledged by local price departments. Price bureaus at different levels will assign price supervisors to local LNG importers and refineries to monitor price variances. A manager of a local LNG wholesaler, who declined to be identified, told China Daily he doubted that the provincial price bureau's measures would turn out as expected. "The LNG supply in Guangdong has been market-orientated. Who would like to run a business at a loss for long?" the manager questioned. The manager said more government departments should get involved to deal with the LNG problem and the authorities should consider subsidizing LNG businesses which carry out the province's recent measures and have been running at a loss. Several local residents told China Daily that they hope the provincial price bureau's measures will work, saying the recent rise in the price of LNG has been a tough burden. "The weather has been cold and Spring Festival is approaching; our family tends to consume more LNG now than in any other season," said Guangzhou citizen Luo Zhenliang. "But we can hardly afford to do so." "As well as minimizing our gas consumption, we have been using a lot more electrical appliances for cooking and for boiling water, but that is just a temporary measure." Like Luo, many other residents in Guangzhou have also resorted to electrical power, which has put pressure on its supply in the past week. Many Guangzhou citizens, especially those on low incomes, have even begun to reuse the long-abandoned honeycomb briquettes as a source of fuel. The price of a 15-kg LNG bottle rose to more than 100 yuan (US$12.33) last month in the province then fell to around 95 yuan (US$11.71) last week thanks to the government's measures to manipulate the price. "The price would definitely rise if we do not take action," noted Ma Zhuangchang, deputy director of the Guangdong Price Bureau. "The period prior to the Spring Festival is generally a peak for LNG consumption." The rise in the price of imported LNG could be one of the reasons for the LNG retail price hike in the province, the official said. Customs statistics indicate that the province imported 3.91 million tons of LNG in 2005, down 6.3 percent from 2004; the average price stood at US$463 per ton, up 23.1 percent. (China Daily January 9, 2006) |
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