Recovering global oil prices will not impact Chinese gas demand as recent growth is reliant on state environmental policies, say several Chinese state and industry sources. "Only if international oil prices hit $100, would China’s gas demand growth reduce due to the higher cost of imports,” says a central government analyst. “And only if prices [were] higher than $80 dollars per barrel, would gas prices be competitive in China”. Compared with coal, liquefied petroleum gas (LPG) and fuel oil, gas struggles to compete on price. Gas demand growth is driven primarily by Beijing’s strict environmental protection policies, which do not allow end-users in southeast China to use high-sulfur fuel anymore. In northern China, the enforcement of the coal-to-gas switching policy has already led to a severe gas shortage during the winter months (IOD Nov.8’17).
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