Parts of North China experienced shortage of natural gas

Parts of North China have experienced a shortage of natural gas in what is blamed on the harsh winter season. PHOTO|FILE.

Parts of North China have experienced a shortage of natural gas in what is blamed on the harsh winter season.

Experts also blamed the jump in prices to international price factors that have been on an all-time high in recent weeks.

International media quoted Ma Chenchen, writing in YICAI Global who said that residents of Weinan city in northwestern Shaanxi province were more affected.

Other affected areas include areas in Hebei province, which neighbours Beijing, had interrupted supply in the beginning and middle of last month, the Chinese government posted on its website.

Gas companies are also under great pressure as the price of liquid natural gas has jumped 25 per cent over the past week and 75 per cent over the past month to CNY8,383 (USD1,328) a ton, or CNY6 (USD0.95) per cubic meter, according to the Shanghai Petroleum and Natural Gas Exchange.

Although gas firms sometimes need to buy gas at market prices when actual demand is greater than the contracted supply, such a huge gap in prices makes them less willing to take part in auctions, leading to a supply shortfall.

The difference between the two incidents is that China’s dependence on coal imports is very low, whereas for natural gas it stands at over 40 per cent, making it difficult for government agencies to find solutions to guarantee supply and stabilize prices, Feng said.

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