SCIO press conference on ensuring energy supply and winter heating
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E-mail China.org.cn, January 20, 2023
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As of last year, global energy prices have continued to remain high and unstable, especially in Europe, where prices of electricity and gas surged dramatically. Given that the energy supply of our country highly depends on imports, how will we maintain the basic stability of energy prices? Thank you.
Lian Weiliang:
Thanks for your question. The stability of energy prices is relevant to people's livelihoods as well as the stable performance of the economy, and thus a public concern. We just said that the global energy demand and supply were complicated and not optimistic last year, with prices picking up sharply. Data shows that from January to November last year, energy prices, as part of the Consumer Price Index (CPI), went up 27% and 38% year on year in the United States and Eurozone, respectively, while natural gas prices increased 26.6% and 56.5% in the two regions and electricity prices 12.9% and 36.3%. In sharp contrast, China, also facing shockwaves from the global market and the test of extreme weather conditions, kept energy prices generally stable and within a reasonable range. This demonstrates the advantages of our system and the assorted measures for ensuring supply and stable prices. From January to November last year, the price of water, power, and fuel for civilian use, as part of CPI, only rose by approximately 3% in China, and the inflation in the price of gasoline and diesel was also lower than in Europe and the US. In particular, the prices of electricity and gas for civilian use were generally stable.
China produces, consumes, and imports large amounts of energy. It is not easy to maintain a stable energy supply and prices while facing a grim external environment, especially with regard to stabilizing prices. The achievements of the past year are really something. The key to achieving them was to seriously implement the decisions and plans of the CPC Central Committee and the State Council; continue to improve the system of energy production, supply, storage, and marketing; and see stabilizing energy supply and prices as a systematic project and promote it through various measures. These efforts can be summarized as follows.
First, we focused on increasing effective supply. The increase of supply is the prerequisite for stable prices. So, we unleashed our advanced production capacities and improved energy production capabilities. We supported enterprises to go into full-capacity production while ensuring safety so as to increase effective supply. We also reinforced transportation coordination and links between production, transportation, and demands.
Second, we focused on improving the pricing mechanism. A well-conceived pricing mechanism is the key to stabilizing prices. We innovated and improved a market-based pricing mechanism for coal and clarified the reasonable price range in the medium and long term. We deepened the reforms making the pricing of on-grid electricity from coal-fired power plants increasingly market-based and adjusted the price range of on-grid electricity from coal-fired power plants with rational means. We also insisted on ensuring people's livelihoods. Government pricing was strictly followed when it came to civilian electric power. Within the coverage of pipeline gas, civilian gas prices were fixed by combining ex-factory prices and pipeline transport prices.
Third, we focused on making good use of medium- and long-term contracts. Signing medium- and long-term contracts is an important way to mitigate price fluctuations. We have encouraged domestic enterprises to sign long-term import agreements early and lock in import resources in advance. We have comprehensively improved the contract signing and implementation rate of long-term agreements. It can be said that medium- and long-term energy contracts have become the ballast to ensure supply and price stability.
Fourth, we have focused on the key role of energy companies in ensuring energy supply. Various energy companies have overcome difficulties and worked hard to increase production and supply. The government has tried its best to help energy companies tackle their difficulties, control costs through medium- and long-term contracts, rationally ease costs through the implementation of price policies, and increase fiscal, tax, and financial support to effectively alleviate the temporary difficulties in operation for some companies. This has created good conditions for ensuring energy supply and price stability.
Thank you.
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