subject: Monopolistic Market Blamed For Gas Pains In China(submit) [print this page] Energy analysts have blamed the country's "monopolistic natural gas market" for one of the most serious gas shortages in decades, made worse by high gas consumption amid freezing temperatures and snowstorms in the south.
The lack of a competitive mechanism in China's gas market has given major gas suppliers few incentives to expand gas output at current low prices.
The gas crisis has raised public doubts about the country's monopolistic gas market and the capacity of Petro China and Sinopec, the country's main gas suppliers, which issued emergency gas in several provinces and regions including Chongqing municipality and Zhejiang province due to the sudden increased consumption and limited storage.
In order to meet the surging gas demand, they should open our gas market and welcome more domestic and foreign companies to create a competitive mechanism, which will trigger an exploration of the potential gas capacity.
Gas production reached 77.5 billion cu m in 2008, a year-on-year increase of 15 percent. Some experts predicted that China will consume 400 billion cu m in 2030 with nearly 40 percent imported from abroad, Jia Chengzao, director of the CNPC Petroleum Institute said.
Apparently, the current gas supply cannot meet the surging demand and gas market must bring in fresh elements. Raising natural gas prices is the first step and then the gas market will open further. But Mr. Cao, head of the price department of the National Development and Reform Commission, the country's top economic planner, said China will not adjust the price of natural gas or issue a major price reform plan anytime soon.
Some netizens think the oil giants are curtailing the market supply to obtain a higher price, but both companies denied that and said they are at full capacity. Cities in the central and southern parts of the country are still facing severe gas shortages after being hit by a cold snap and heavy snow. The company suspended natural gas supply to taxis at five of the city's nine gas stations.
Wuhan, the capital of Hubei province and a city in the middle reaches of the Yangtze River, cut natural gas supply to all industries and businesses to ensure residential consumption last week after one of its worst snowstorms in the past four decades, facing a shortage of about 1 million cu m of gas every day.
The unusually early snowstorm in the country this winter has resulted in a surge in gas consumption for heating, diverting supplies and affecting public transport and industries.
