China’s Smart Gas Meters Spark Suspicions of Fraud

After the widespread replacement of smart gas meters for households by Chongqing Gas Group at the end of last year, residents found a sharp increase in their gas bills. The image shows residential buildings in Chongqing city on March 19, 2024. STR/AFP

Residents in China’s Sichuan Province and Chongqing Municipality say their gas utility bills skyrocketed after their existing natural gas meters were replaced with smart gas meters. Customers expressed their grievances online, sparking public outrage across multiple cities.

At the end of 2023, Chongqing Gas Group Corp Ltd upgraded a large number of households to smart gas meters. With a population exceeding 32 million, Chongqing is one of the four direct-administered municipalities under the central government of China. After installing the new meters, residents began reporting on the “Chongqing Online Governance Platform“ that their gas bills had begun to soar despite no change in usage patterns.

Since February of this year, the number of related complaints has gradually increased, involving many districts and counties such as Jiulongpo, Yubei, Nan'an, Beibei, Jiangjin, and Yongchuan in Chongqing. In April, customer complaints increased significantly, ranking among the internet’s top searches for the region.

Subsequently, residents in various parts of Sichuan Province also alleged that their gas bills had increased significantly in Chengdu, Nanchong, Neijiang, Zigong, Mianyang, Ziyang, Deyang, and Guang'an. As of April 22, on the Sichuan Provincial Government’s “Questioning Governance in Sichuan“ platform, the issue of abnormally high gas bills continued to be reported by the public.

On April 17, well-known playwright Li Yaling posted on her Weibo stating that she had been in Hainan for two months. Upon returning home to Chengdu, she found that she had been charged for consuming over 177 Ccf of gas when she was not home.

After Ms. Li’s post, her neighbors checked their bills and were shocked to find they were also higher than usual. According to the People’s Daily, one of the neighbors, who had been in the United States for three months, found that she was being charged over 2,000 yuan ($278)  for gas usage while she was traveling. A second neighbor, who claimed they rarely cooked, found that their gas meter had registered 127 Ccf of gas consumed in March. A third neighbor also found that his March bill had increased 50 percent over the payment made in March of the previous year.

Residents in some areas of Sichuan reported online that they received gas bills of 3,000 yuan ($417) for unoccupied new houses still under interior renovation. Some owners were surprised to learn they had consumed 177 Ccf of gas during the renovation phase.

Concerns Over Rising Gas Bills Continue

The ongoing discussion of skyrocketing gas bills has garnered widespread attention, extending beyond the regions of Chongqing and Sichuan. Individuals from various locales conducted self-audits, uncovering similar billing anomalies.

Gao Yu (pseudonym), a resident of Yangzhou, Jiangsu Province, recounted to The Epoch Times on April 21 his shock at discovering his household’s gas bill more than doubled from 156 yuan ($21)  to over 300 yuan ($41) in January, an unprecedented surge. Despite raising concerns with the meter reader, who reassured him of no issues, Mr. Gao initially attributed the spike to his usage patterns until he discovered numerous similar experiences online.

Likewise, Li Yu (pseudonym) from Xiaogan, Hubei Province, said she observed her gas meter registering usage even when only using tap water, a phenomenon unheard of previously. Whereas 500 yuan ($69) on her prepaid gas card would suffice for a year previously, now, following a 1,000 yuan ($138) recharge, it barely lasted six months.

Chang Hua (pseudonym) of Nanjing, Jiangsu Province, noted abnormality following a meter replacement last November, with the family’s gas bill soaring from a monthly average of 40 to 50 yuan ($5.50-$7) to over 940 yuan ($130) for four months post-replacement, a fivefold increase. His neighbors echoed similar grievances.

With discontent over exorbitant gas bills reaching a boiling point, authorities have come under pressure to respond.

On April 13, the Chongqing municipal government announced the formation of a team assigned to probe Chongqing Gas Group, Kaiyuan Gas, and other relevant companies. Subsequently, on April 19, Chairman Che Dechen of Chongqing Gas Group was dismissed. Authorities acknowledged issues such as erroneous meter readings, unlawful estimations, and billing cycle discrepancies. Chengdu officials assured full refunds for confirmed excess gas fees by the implicated gas companies.

Despite the assurances from officials, the public has remained skeptical. Some customers argue that refunding excessive charges should be standard practice rather than portrayed as a favor, advocating for holding those accountable for potential criminal charges. Other customers liken the systematic overcharging of gas fees to organized crime, questioning the distinction between such actions and outright fraud.

Gas Company Profits Surge with Support from Largest State-Owned Enterprise

According to reports from Chinese media, Time Weekly, the financial records of Chongqing Gas Group revealed a robust performance in 2023. Operating income was $1.4 billion, marking a 17.26 percent year-on-year increase, and operating profits were $78.5 million, up by 28.86 percent. Gas sales volume during this period soared to 3.496 billion cubic meters, witnessing an increase of 240 million cubic meters, with a growth rate of 0.69 percent.

In the fourth quarter of 2023, Chongqing Gas achieved an operating income of $428 million and operating profits of $36 million. In comparison, during the fourth quarter of 2022, the company recorded an operating income of $346 million and operating profits of $2.9 million. Notably, in the fourth quarter of 2023, Chongqing Gas witnessed a remarkable 23.59 percent year-on-year increase in operating income and an extraordinary surge of 1127 percent in operating profits, representing a more than 11-fold increase.

Furthermore, the semi-annual report of the gas meter company Jinka Smart for the year 2023 highlighted the smart domestic gas terminal and system as its highest-grossing product, achieving $123 million in sales, marking an 18.32 percent year-on-year increase. Sales in the eastern region contributed the highest revenue, totaling $70.4 million. The net profit attributable to shareholders of the listed company in 2023 ranged from $52.5 million to $62 million, reflecting a substantial 40 percent to 65 percent year-on-year increase.

Other providers of new smart gas meters, such as Newtian Technology and Qianjia Technology, also reported year-on-year revenue growth in their 2023 annual reports.

Publicly available information reveals that Sichuan Lianfa Natural Gas Co., Ltd. shareholders include Sichuan Chuangang Gas Co., Ltd. and Chengdu Gas Group Co., Ltd., with Chengdu Gas Group recognized as the largest urban gas operation enterprise in the Chengdu region. Chongqing Gas Group Co., Ltd. and Chengdu Gas Group Co., Ltd. count China Resources Gas Investment (China) Co., Ltd. among their shareholders.

China Resources Gas Investment (China) Co., Ltd., established in January 2007, is recognized as one of China’s largest urban gas operators. It operates as a subsidiary of China’s largest state-owned enterprise, China Resources Group, with investments spanning over 100 large and medium-sized cities such as Nanjing, Chengdu, Wuhan, Chongqing, Suzhou, etc. Its operations cover 18 provinces and two direct-administered municipalities under the central government, with an annual gas sales volume exceeding ten billion cubic meters, serving over ten million households.

Gas Customer Threatened in Suzhou After Posting Online

On April 20, a female customer from Kunshan City in Suzhou submitted an online article shedding light on gas billing issues in Suzhou, Jiangsu Province. Her article called for an investigation and garnered significant attention online. On April 22, China Resources Gas Suzhou employees pressured her to remove the post.

Allegedly, five company employees, along with community officials, visited her residence to explain the reasons behind the gas bill increases and then replaced her gas meter. After their departure, local police officers visited her home and later contacted her husband’s employer, allegedly pressuring them to have the post deleted.

Feeling threatened, the woman posted an online apology and implored China Resources Gas to cease involvement with her family. A reporter with The Epoch Times attempted to reach the woman for further verification but was unsuccessful.

Economist Li Hengqing believes this incident is a conflict between the government and its citizens. He told The Epoch Times the situation was like “encountering bandits on the road, where individuals witness their hard-earned money being seized before their eyes.”

Mr. Li said, “Without resistance from the people, exploitation will persist unchecked.”