① Guangzhou Development Announces Gas Sales Price Adjustment for Wholly-owned Subsidiaries; ② Prior to Guangzhou, the maximum gas price for non-residential pipelines was reduced by 0.16 yuan/cubic meter; Prior to Guangzhou, Hangzhou and Rizhao both lowered the maximum sales price of natural gas for non-residential pipelines this month, and the amount was reduced even more.
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Finance Association, July 25 (Reporter Liu Yue) In response to the notice of the Guangzhou Municipal Development and Reform Commission to dynamically adjust the sales price of gas for non-residential pipelines for the second time in the year, Guangzhou Development (600098.SH) announced a gas sales price adjustment for its wholly-owned subsidiary. The maximum price of gas for non-residential pipelines was reduced by 0.16 yuan/cubic meter.
Guangzhou Development announced this evening that Guangzhou Gas Group Co., Ltd., a wholly-owned subsidiary of the company, will dynamically adjust the sales price of gas for non-residential pipelines. Starting July 20, 2024, the maximum sales price for non-residential pipeline gas in Guangzhou was adjusted from 4.58 yuan/cubic meter to 4.42 yuan/cubic meter. The implementation period is until January 19, 2025.
Guangzhou Development is the first listed company to recently announce a reduction in the maximum price of gas for non-residential pipelines. It is also the second time during the year that the company announced an adjustment to the maximum price of gas for non-residential pipelines. In January 2024, the maximum gas price for non-residential pipelines was adjusted from 3.95 yuan/cubic meter to 4.58 yuan/cubic meter, and this time it was adjusted from 4.58 yuan/cubic meter to 4.42 yuan/cubic meter. According to calculations, the amount of this reduction was 0.16 yuan/cubic meter.
According to public information, on July 18, the Guangzhou Municipal Development and Reform Commission issued the “Notice Concerning the Second Dynamic Adjustment of Guangzhou Pipeline Gas Sales Prices and Related Issues in 2024", which states that after carrying out a cost investigation on the purchase costs of natural gas sources (June 1, 2023 to November 30, 2023) of 18 pipeline gas companies in the city, with the approval of the municipal government, it is now starting to adjust the gas source price for non-residential pipeline gas sources in conjunction with the sales price, and lower the sales price of non-residential pipeline gas. Gas operators are not allowed to rise on their own, and the extent of the decline is unlimited.
(Photo source: Screenshot of the Guangzhou Municipal Development and Reform Commission website)
Guangzhou develops major businesses such as electricity, new energy, gas, and energy logistics. According to financial data, the company's pipeline gas product revenue last year was 9.336 billion yuan, accounting for nearly 20%.
According to the company's main production and operation data for the first half of the year, as of June 30, the company's total pipeline gas and LNG sales volume was 1.882 billion cubic meters, an increase of 25.95% over the previous year. Pipeline gas sales volume was 1.113 billion cubic meters, up 33.60% year on year; among them, residential and public welfare users sold 0.229 billion cubic meters, up 8.25% year on year; industrial user sales volume was 0.176 billion cubic meters, up 1.44% year on year; commercial user sales volume was 0.108 billion cubic meters, up 19.95% year on year; distribution and direct supply volume was 0.599 billion cubic meters, up 67.70% year on year.
It is worth noting that prior to Guangzhou, Hangzhou and Rizhao both lowered the maximum sales price of natural gas for non-residential pipelines this month, and the amount was cut even more. “Hangzhou Release” was published on WeChat on July 15, stating that the Hangzhou Municipal Development and Reform Commission recently launched a price linkage mechanism to lower the maximum sales price of natural gas for non-residential pipelines, from 4.18 yuan per cubic meter (tax included, same below) to 3.90 yuan, a reduction of 0.28 yuan. The new price will be implemented from April 1, 2024. The Rizhao Municipal Development and Reform Commission issued a notice on January 22nd to adjust the sales price of gas terminals for non-residential pipelines from 4.254 yuan/cubic meter to 4.065 yuan/cubic meter (down 0.189 yuan). The sales price is the maximum price, which will take effect from April 1, 2024.
From an industry perspective, industrial fuels have replaced urban gas as the largest consumer of natural gas. According to data from the National Energy Administration, China's natural gas consumption last year was 394.5 billion cubic meters, up 7.6% year on year, and natural gas accounted for 8.5% of total primary energy consumption. Looking at the consumption structure, urban gas consumption increased 10% year on year, accounting for 33% of total natural gas consumption; industrial fuel gas consumption increased 8% year on year, accounting for 42%; and chemical fertilizer gas consumption accounted for 8%.