Guangxi Zhuang Autonomous Region and five provinces in southern China have recently begun offering fuel subsidies to poverty-stricken citizens amid natural gas price hikes.

On Monday, Guangzhou, the provincial capital of Guangdong Province, decided to grant 20 yuan (US$2.5) per month as temporary fuel subsidy to each of low-income families before the Chinese Lunar New Year, which falls on January 29 this year.

Prior to this, Guangxi, Hainan, Jiangsu, Anhui and Jiangxi also made decisions to extend similar fuel subsidies ranging from 10 to 20 yuan a month to poor residents.

"The move aims to ease the pressure from continuous price hikes for liquefied natural gas (LNG) on low-income residents," said Lin Yuanlin, a social security official with the local civil affairs bureau in Nanning, capital of Guangxi Zhuang Autonomous Region.

Wei Rilong, a laid-off worker in Changgangling of Nanning, piled up coal briquettes in a small wooden box in the kitchen. Beside the box was an empty LNG tank covered with dust.

Wei said, "With the fuel subsidy, we can afford a tank of LNG for the coming week-long holiday."

"At the end of last year when LNG price exceeded 100 yuan (US$12.3) per 15-kg tank, I dared not buy gas any longer and turned to coal," Wei added.

Since last August, most parts of southern China have experienced a substantial price rise for LNG. The hike was more than 40 percent in Hainan, Guangxi and Guangdong. And in Hainan's scenic city Sanya, the LNG was once priced at as high as 120 yuan per 15-kg tank, the highest across the nation.

Mo Xiong, general manager of Nanning Sanran Fuel Gas Co Ltd, believed that oil price hikes were the decisive factor behind higher prices for LNG.

Currently, China depends on imports to meet more than one third of the domestic demand for LNG, a byproduct of oil refining. The proportion is 60 percent in eastern and southern China and even up to 80 percent in Guangdong.

"Imported natural gas is priced high and it is difficult for the gas produced in northern China to be transported to southern regions. That's the reason for LNG price hikes," Mo Xiong explained.

"LNG imported by Guangdong is now priced at 7,000 yuan (US$863) per ton. That is to say, wholesale price of LNG per tank has reached 101 yuan," Mo added.

Latest news said the National Development and Reform Commission on Tuesday issued a circular on intensifying management over LNG pricing by local market regulators and petrochemical enterprises.

Professor Qian Zongfan, a social scientist from Guangxi, considered that the fuel subsidy extension signified diversified regulation by government.

PetroChina and Sinopec, China's two leading onshore oil producers, said they will operate their LNG facilities on full steam to meet the great demand at home.

(Xinhua News Agency January 18, 2006)