Hebei Province Natural Gas Price Management Measures Maintain Consumer Rights with New Rules

Since the second half of this year, the natural gas market for residents of many provinces and cities in China has “buzzed up”, and it has been fermented into a natural gas “price surge” across the country. In order to regulate the management of natural gas prices and protect the legitimate rights and interests of operators and consumers, Hebei Province has formulated the “Measures for the Management of Natural Gas Prices in Hebei Province (Trial)” by the Hebei Provincial Price Bureau, and will try it out on August 20 this year. The formulation of the new regulations on natural gas price management has promoted the sustained and healthy development of the natural gas industry in Hebei Province, and it has also benefited the rational rights protection of civil natural gas consumers.

First, the city's civil natural gas sales prices implement government pricing

The new approach provides that urban natural gas residents use natural gas for gas and vehicle natural gas sales prices to implement government pricing, non-residents use gas-to-home sales prices for government guidance, and urban gas initial installation fees for government pricing or government guidance.

2. Emphasizing the need for prior hearings to formulate and adjust prices of residential gas

The new approach emphasizes that residents' use of gas includes the use of residential gas, school gas, and non-profit welfare institutions. When formulating and adjusting the price of gas for residential use, it shall obtain prior approval from the Price Bureau of Hebei Province, and then conduct cost supervision and review, organize price hearings or implement linkage plans in accordance with the law, and combine the cost supervision, examination, and hearing materials with the adjustment and pricing plans. Reported to the Provincial Price Bureau for approval.

Third, civil natural gas will be linked with the upstream price, in principle, no more than one time in one year

The new approach stipulates the establishment of a linkage mechanism between the sales price of natural gas to households and the upstream natural gas price. When the price of upstream natural gas or pipeline transportation is adjusted, the sales price of natural gas to households can be adjusted accordingly. In principle, the price of residential gas does not link more than once a year.

Fourth, natural gas business enterprises need to be clearly marked

The new approach requires natural gas operators to follow the principles of fairness, legitimacy, honesty, and credit. They must clearly indicate the price of the natural gas at the business site, and indicate the quality of natural gas, the unit for which it is priced, the natural gas-to-household sales price (the price of gas for classified users), and the initial installation of city gas. Expenses and policy basis and other content, and strengthen the maintenance of infrastructure such as pipe network, regularly check the meter to ensure that the gas quality, pressure, measurement, etc. meet the national standards.

V. The profit rate of natural gas operating companies must not exceed 8%

The new approach stipulates that a reasonable return to be obtained under the normal operating conditions of a natural gas operating enterprise, that is, the profit rate of the enterprise's net assets shall be determined not exceeding 8%.

Sixth, new commercial housing developers to pay the initial gas installation fee

The new measures expressly stipulate that the initial installation fee for urban gas consists of the public pipeline network construction fee and the courtyard pipe network construction fee. The initial installation cost of existing urban city gas is charged according to the standard set by the local price authority. The initial installment fee for newly-commercially-built city gas shall be included in the price of commercial housing as development and construction costs, shall be paid by the real estate development unit, and shall not be separately charged to users.

VII. Natural gas operating companies must not impose service fees on users

The new approach also stipulates that natural gas operators may not force users to purchase designated natural gas combustion appliances and heating appliances, and may not charge users with mandatory service fees.

8. The sales price of natural gas for vehicles is linked to the retail price of gasoline

At the same time, the new approach also stipulates that a mechanism for linking the sales price of natural gas for vehicles with the retail price of gasoline should be established. The price of natural gas for vehicles sold should be adjusted in accordance with the price ratio of petrol retail prices as stipulated by the state and adjusted with the retail price of gasoline.