Households in Shenzhen have to pay 16.6 yuan (US$2) for a cubic meter of pipeline gas from February, which is 2.4 yuan or 17 percent higher than the 14.2 yuan they paid last month, according to the city's price bureau yesterday.

The price for commercial use will be raised to 17.6 yuan from 16.6 yuan.

The government has approved the proposal by the Shenzhen Gas Corporation (SGC), the city's sole pipeline gas provider, to increase the price amid the pressure of rising international gas prices, Zhang Wei, a spokeswoman with the price bureau said yesterday.

The price for gas departing the Middle East rose from US$550 per ton at the beginning of last December to US$680 in mid-January, Zhang said.

Bao Deyuan, SGC chairman, complained in a call-in program on Shenzhen Radio on Tuesday that his company was losing 500,000 yuan daily.

SGC supplies pipeline liquefied petroleum gas (LPG) to 700,000 households in the city, and LPG cylinders as well. The pipeline gas price had remained stable since last November, while the official gas price for a 15-kg cylinder was raised to 105 yuan before the Spring Festival.

Bao said in the program that the pipeline gas price in Shenzhen was lower that the 17 yuan per cubic meter in Dongguan and 17.9 yuan in Shantou.

The city relies heavily on imported gas, which is subject to price fluctuations in the international market, Bao said. He assured listeners that the pipeline gas price would drop by 10 percent when the Guangdong liquefied natural gas (LNG) project was completed by the end of this year.

Local gas users will benefit from the project, which has signed a fixed price contract with its Australian gas supplier for 25 years, Bao was quoted by the Shenzhen Special Zone Daily as saying yesterday.

(Shenzhen Daily February 9, 2006)