Gas company kills price scheme for home heat

A company that provides natural gas for winter heating in Baoding, Hebei province, has given up its limit on the amount of gas sold at a discounted price. Now they can buy as much as they want for their homes.

The limit had aroused discontent from customers and drawn the attention of the local government.

China Gas Hongjie Energy Development Co in Baoding's Dingxing county notified customers earlier this month that every household would be eligible to buy gas at a discounted price of 2.68 yuan ($0.38) per cubic meter. However, each purchase would be limited to 100 yuan ($14).

A customer would pay in advance and the company would apply a credit to a card. That information would then be transferred to the gas meter at the home.

Under the old policy, there was no limit on purchases of natural gas at the higher price of 3.60 yuan per cubic meter.

Guo Jian'guo, a resident of Yangcun town in Dingxing, said 100 yuan could only buy 37 cubic meters of natural gas, enough for just two or three days in his 600-square-meter home.

"To buy as much natural gas as possible, we have to go to the selling station multiple times and then stand in a long line with others and wait. Lots of people were there," Guo said. "All of them were worried about not having enough gas."

The company abandoned the policy on Monday, the fourth day of the 2019-20 winter heating season, after it was summoned by county officials demanding that it immediately cease the practice, along with other improper policies.

Households in the county now can buy as much gas as they need at a single price.

Xie Yongfei, deputy head of Dingxing county's development and reform bureau, said the company is a branch of China Gas Holdings, which supplies natural gas for about two-thirds of Baoding's 15 counties.

"All purchase restrictions by China Gas in Baoding have been lifted, including in Gaobeidian, Xushui and Xiongxian," Xie said, adding that the scheme had violated regulations.

According to a notice about the price of natural gas for residential use from the National Development and Reform Commission in May last year, the price for residential use is to be set by local governments based on several factors, including a baseline price from the commission, residents' consumption habits, the operating status of the gas providers and the local government's financial situation.

"Natural gas providers are not allowed to restrict supplies without permission or impose purchase limitations," the notice said.

The company has not yet provided an explanation about why it came up with the old policy.

But a notice from the China Gas branch in Xiongxian, Xiongan New Area, which was posted online by netizens, said the company had lost nearly 47 million yuan in 2017 and 2018, mainly because of price increases from its upstream suppliers.

The government is investigating the difficulties the company is having and will roll out supportive measures, Xie said, adding that the government supports consumers and providers alike through subsidies every year.

In recent years, to improve air quality, areas in northern China have tried replacing coal with clean energy for heat energy, including natural gas and electricity.

As of this year, more than 5 million households in rural areas of Hebei have made the substitution and started using clean energy for heating, the provincial government said.