The government may raise the wholesale price of natural gas by 10 percent this month, said a source with China's largest oil producer.

 

This would be the second hike in its wholesale price since December 2005 when the National Development and Reform Commission (NDRC), the top economic planner, raised the price by 50 to 150 yuan per 1,000 cubic meters, an average increase of 10 percent.

 

A China National Petroleum Corporation official, who spoke on condition of anonymity, gave no further details including the timing of the price hike announcement.

 

Analysts said China's government-regulated gas price is much lower than the international level.

 

The government has been mulling energy price reform in a bid to encourage efficient energy use by companies and individuals. China reduced energy consumption per unit of gross domestic product by 1.2 percent last year, well short of its 4 percent target.

 

"The energy price reform is irreversible as current fuel, gas and water prices do not reflect the scarcity of resources," NDRC's head Ma Kai said at a press conference held on the sidelines of the National People's Congress, or parliament, on March 7.

 

On Sunday Beijing raised the price of natural gas for civil use by 0.15 yuan per cubic meter to 2.05 yuan to encourage energy efficiency.

 

(Xinhua News Agency April 4, 2007)