Sinoenergy Corporation (SNEN.OB), a manufacturer of compressed natural gas vehicles, a designer of gas station equipment, and an operator of CNG filling stations, has announced that the Company expects to benefit from the recent increase in natural gas retail prices for vehicle users.
On November 8, the National Development and Reform Commission in China raised the price of natural gas for all industrial users; however, this price increase was not applicable for CNG utilized in vehicle use, fertilizer use, or residential use. Because the commission felt that CNG powered vehicles have a positive impact on the environment in China, they stated that these vehicles should have priority when using natural gas.
The National Development and Reform Commission in China also requested that local municipalities increase CNG retail prices. As a result, Sinoenergy believes that this policy will improve the profitability for CNG filling station operators, therefore encouraging greater investment in the sector.
“We are pleased to see the Chinese government’s strong support for CNG vehicles. As a result of these policies, our purchase price for CNG currently remains unchanged, while we have benefited from increasing retail prices at which we sell CNG to vehicle users,” said Mr. Bo Huang, CEO of Sinoenergy Corporation. “We believe the raising retail price for vehicles will aid in encouraging the development of a CNG filling station network throughout mainland China. And we remain confident that our business model will support improving revenues and profitability as Sinoenergy’s new stations comes on line.”
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