China is implementing a new policy to improve the efficiency of its natural gas market, Bloomberg reports, allowing the country’s gas suppliers more freedom to change prices to meet seasonal supply and demand fluctuations.
According to the National Development and Reform Commission, distributors buying gas from state suppliers for residential use will have greater flexibility to move around the benchmark and suppliers will be restricted to how much they can increase rates. The policy is set to be rolled out on June 10th.
The move is seen as a sign of further market liberalisation in one of China’s fastest-growing and most state-influenced sectors. President Xi has made importing natural gas a key policy in keeping with environmental commitments, with the goal of gas accounting for 15% of the nation’s energy supply by 2030. Rigidity with the market’s pricing mechanisms, however, has created inefficiencies such as shortages during winter months.