New pipeline gas users will no longer have to pay an installation fee which has been in place for two decades, the Shenzhen Gas Corp. said Thursday.

The scrapping of the fee is in line with a notice issued by the provincial pricing bureau Wednesday.

"It is unreasonable to keep charging the installation fee, which was used to fund the construction of gas pipeline network, under current circumstance," the bureau said in a statement on its Web site.

"Local authorities in Guangdong should stop collecting the fee from new gas pipeline users," it said.

Although the notice, reported by Chinese-language newspapers Thursday, said the fee would be scrapped starting Friday, the gas company and municipal pricing bureau said that they were not clear when the policy would take effect in Shenzhen, as they had not received an official notice from the provincial bureau.

"New users are still required to pay 2,950 yuan (US$378) each household as installation fee, or 800 yuan if pipelines have been installed by developers," said a spokesman for Shenzhen Gas Corp.'s administration office.

He said the new policy may take effect from Monday.

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According to the company, there are currently about 580,000 pipeline gas users in Shenzhen and the total installation fees collected in the past two decades is estimated at between 464 million and 1.71 billion yuan.

However, none of these users can claim a refund.

The provincial bureau said in the notice that local authorities may increase pipeline gas rates after scrapping the installation fee.

"We are thinking about giving a certain discount of gas price to users who have already paid the installation fee, after the gas price is increased. But a new tariff will not be published until we receive an official notice from the provincial price bureau," said Zhang Wei, a spokeswoman for the municipal price bureau, which is responsible for approving any rate change for pipeline gas.

Some potential users were worried a price hike would outweigh the benefits of the fee cancellation.

"I suggest the price bureau hold a public hearing before announcing a price increase," said a Shenzhen Daily reader surnamed Wu.

The Shenzhen Municipal People's Congress had considered scrapping the installation fee earlier in July when revising the gas management regulation. However, it decided not to do so until Shenzhen's transition from liquefied petroleum gas to natural gas is completed in 2008.

Editor: Yan