National Development and Reform Commission, National Energy Administration: Improve the natural gas pipeline transportation price mechanism within the province to promote high-quality development of the industry.

On August 1st, the National Development and Reform Commission and the National Energy Administration issued the "Guiding Opinions on Improving the Price Mechanism for Natural Gas Pipeline Transport within Provinces to Promote High-quality Industry Development". It pointed out that the transportation prices of natural gas pipelines at all levels within provinces (excluding pipelines for internal use by enterprises) are to be determined by the provincial development and reform department, and pricing authority is not to be delegated further. The prices of cross-provincial natural gas pipeline systems within provinces and their supporting branches that have been included in the national unified pricing system will no longer be priced by the provincial development and reform departments. The transportation prices of natural gas pipelines within provinces should adopt a unified pricing model, transitioning from "one line, one price" or "one enterprise, one price" to zonal pricing or a unified price for the entire province, effectively connecting with the pricing mechanism of cross-provincial natural gas pipeline transport, and helping to create a "national network". During the transition period, benchmark pricing and other measures can be implemented to guide pipeline operators to excel, integrate resources, and improve pipeline operation efficiency. The original text: National Development and Reform Commission National Energy Administration on Guiding Opinions on Improving the Price Mechanism for Natural Gas Pipeline Transport within Provinces to Promote High-quality Industry Development Price Reform [2025] No. 1014 Development and Reform Commissions, Energy Administrations, local governments, and the Xinjiang Production and Construction Corps: In order to implement the spirit of the Third Plenary Session of the Twentieth CPC Central Committee and the decisions of the CPC Central Committee and the State Council on deepening the reform of the oil and gas market system and improving the price governance mechanism, strengthen price supervision in the natural monopoly sector, increase the efficiency of natural gas pipeline transport, and promote high-quality industry development, the following opinions are proposed for improving the price mechanism for natural gas pipeline transport within provinces. 1. Clarify pricing authority and scope The transportation prices of natural gas pipelines at all levels within a province (excluding pipelines for internal use by enterprises) are to be determined by the provincial development and reform department, and pricing authority is not to be delegated further. For cross-provincial natural gas pipeline systems within provinces and their supporting branches that have been included in the national unified pricing system, the provincial development and reform department will no longer determine prices. 2. Reasonably determine the pricing model The transportation prices of natural gas pipelines within provinces should adopt a unified pricing model, transitioning from "one line, one price" or "one enterprise, one price" to zonal pricing or a unified price for the entire province, effectively connecting with the pricing mechanism of cross-provincial natural gas pipeline transport, and helping to create a "national network". During the transition period, benchmark pricing and other measures can be implemented to guide pipeline operators to excel, integrate resources, and improve pipeline operation efficiency. 3. Scientifically determine price levels (1) Unified pricing method and principles. Based on the strict implementation of cost supervision, the provincial development and reform department will determine the transportation prices of natural gas pipelines within provinces by the method of "allowable costs plus reasonable returns", that is, determining allowable income by calculating allowable costs and regulatory allowable returns, considering gas flow (throughput) to determine pipeline transportation prices. The benchmark prices can be determined based on the average price level of pipeline operators in the province, or by referencing the price levels of pipeline operators with better cost management. If zonal pricing is implemented, price zones will be divided based on the local natural gas market structure and pipeline distribution. The prices of new pipeline transportation should be based on benchmark prices, prices in the region, or unified prices for the entire province. (2) Reasonably set pricing parameters. The depreciation period of natural gas pipeline assets is generally set at 40 years. Safety production costs should be fully audited in accordance with relevant national regulations to ensure the safe and stable operation of pipelines. The allowable return rate is determined by factors such as pipeline construction needs and user affordability, generally not exceeding the 10-year treasury bond yield rate by 4 percentage points. The determination of pipeline gas flow (throughput) should set a minimum load factor requirement, considering factors such as promoting the efficiency of pipeline utilization, actual transportation loads of enterprises, and pipeline operational stages, generally not less than 50%. Other pricing parameters can refer to relevant regulations on the management of cross-provincial natural gas pipeline transport prices and cost supervision methods, combined with local conditions for reasonable determination. (3) Clarify the price monitoring cycle. Provincial natural gas pipeline transportation prices will be subject to regular auditing and dynamic adjustments, with a regulatory cycle generally set at 3 years. In the event of significant changes in assets, costs, gas flow, etc. during the regulatory cycle, early auditing can be conducted. 4. Optimize pipeline planning and investment management Provinces should strengthen the construction and operation management of natural gas pipelines within the province, adhere to overall planning and scientific approval, ensure that pipeline construction is economically reasonable and operationally efficient. The provincial energy authority is responsible for unified planning of natural gas pipelines within the province. It is necessary to enhance systematic planning, optimize the layout of natural gas pipelines across the province based on compliance with national planning and local resource endowment and market supply and demand situations, reduce transportation hierarchy, shorten transportation paths, and avoid redundant construction. Investment projects in pipelines and supporting facilities should be strictly examined and controlled, avoiding unnecessary intermediary links and projects that are economically unfavorable and not conducive to efficient resource utilization. Project approval documents should clearly specify the pipeline transportation price policy to be implemented after the project goes into production. The review of investment entities should be strengthened, giving priority to supporting existing pipeline operators with strong comprehensive strength in investing and building new pipelines, fully utilizing existing resources, promoting centralized integration and operation. Under the premise of compliance with government planning and safe operation of the pipeline network, support should be given for urban gas companies and large users with conditions to access natural gas pipelines from national and provincial trunk lines, branch lines, etc. 5. Reduce gas supply links Provincial development and reform departments and energy authorities should assess and comprehensively promote the compression of gas supply links within the province to reduce layered price increases and lower downstream gas costs. Encourage upstream gas suppliers to engage in direct purchasing and sales with urban gas companies and large users. For gas supply links such as "back-to-back" fractionation stations that do not have substantial pipeline investments or provide necessary pipeline transport services, further efforts should be made to clear and cancel them; for those that are temporarily difficult to cancel, service prices should be strictly audited based on the principle of only compensating for operational and maintenance costs. If gas is supplied through multiple provincial pipelines, provincial development and reform departments can set a cumulative upper limit on pipeline transportation prices as needed to optimize transportation paths and reduce the burden on users. 6. Standardize market order Natural gas pipeline operators within the province should strictly comply with pipeline transportation price policies, refrain from deliberately circumventing government pricing by means of surrogate fees and pipeline leasing fees, and avoid raising pipeline transportation prices through changes in pricing methods or forced services. Enterprises with gas trunk network capabilities in supply areas must not use their network monopoly advantages to mandate unified purchasing and sales and charge higher prices. It is necessary to implement fair access and utilization requirements for network facilities, standardize gas transportation services, contract performance, information submission, and public disclosure. Provincial development and reform departments should actively cooperate with market supervision departments to strengthen price supervision and inspection, strictly investigate and deal with price violations by relevant enterprises, publicly expose serious violations, and effectively maintain order in the natural gas market. 7. Strengthen organizational implementation Provinces should comprehensively investigate the number of natural gas pipelines, investment entities, and operations within the province, form a list of natural gas pipelines that should be subject to government pricing, and continuously update it. Systematic evaluations should be carried out on pipeline planning, investment, and price management, and optimizations should be made promptly in accordance with relevant requirements. It is necessary to expeditiously formulate and improve management measures for natural gas pipeline transportation prices within the province, clarify the transitional period and transition methods for price mechanism reform, and organize implementation in a stable and orderly manner. National Development and Reform Commission National Energy Administration July 28, 2025 This article is selected from the "National Development and Reform Commission's official website"; GMTEight Editor: Xu Wenqiang.