- Gasoline and diesel retail prices adjustment to benefit the Company in the long term -

NEW YORK, July 16 /PRNewswire-FirstCall/ -- China Natural Gas, Inc. (OTC Bulletin Board: CHNG), one of the leading providers of compressed natural gas (CNG) for vehicular fuel and pipeline natural gas for industrial, commercial and residential use in Xi'an, China, today commented on the recent price adjustment on retail gasoline and diesel prices announced by the China's National Development and Reform Commission ('NDRC') in June 2008.

According to NDRC's announcement, China's gasoline and diesel retail prices were increased by RMB 1,000 yuan per tonne, a 16 percent and 18 percent increase, respectively. The price of natural gas and liquefied petroleum gas was left unchanged.

Mr. Qinan Ji, CEO and Chairman of the Board of China Natural Gas, stated, 'We believe the most recent upward adjustment of retail gasoline and diesel prices will benefit our company in the long term. As a result of the price increases, more vehicle owners are converting their cars into hybrids as they realize cost savings associated with utilizing natural gas instead of gasoline. The cost for converting a regular sedan is approximately RMB 6,000 yuan, but vehicle owners can save approximately 60% of the fuel cost by using CNG as an alternative to gasoline. Month to date, our auto body shop converted an average of 25 cars per day in July, this is up substantially from an average of 7 to 9 cars per day in the first quarter and second quarters of 2008.'

Mr. Ji continued, 'In the second quarter of 2008, we converted approximately 700 cars, up substantially from 500 cars in the first quarter of 2008. We believe this trend toward conversion will continue to be strong and, despite having a slightly lower gross margin than our filling station business, the conversion business will drive overall demand for natural gas sales in the future.'

About China Natural Gas, Inc.

China Natural Gas, Inc., ('CHNG'), is the first China-based natural gas retailing company publicly traded in the U.S. It currently owns and operates a network of CNG retail filling stations as well as a 120 kilometer long compressed natural gas pipeline in Xi'an, China. Xi'an is a fast growing Chinese city supported by a population of approximately eight million and is the 'gateway' to the broad Western regions of China. CHNG has three business segments: retail natural gas at company-owned filling stations, end user delivery of natural gas services to residential, commercial and industrial customers, and conversion of gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered vehicles. Currently it is estimated that there are 5,000 buses and 20,000 taxis using CNG in Xi'an.

This press release may contain forward-looking statements. These statements are based on the current expectations or beliefs of China Natural Gas, Inc. management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including the fluctuation of natural gas prices, the availability of natural gas supplies, changes in governmental regulations and/or economic policies and our ability to penetrate the new markets.

    CONTACT
    In the U.S.:
    Ashley Ammon MacFarlane or Wei-Jung Yang
    ICR, Inc.
    203-682-8200

    In Asia:
    Dan Joseph
    ICR, Inc.
    +86 10 8523 3087

SOURCE China Natural Gas, Inc.

Source: PR Newswire (July 16, 2008 - 5:13 PM EDT)

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