NDRC issues ladder pricing guideline for gas

The National Development and Reform Commission, China's top economic planner, issued a new guideline on Friday to establish a ladder pricing system for residential natural gas use, to create a flexible energy consumption environment in China's urban areas.

The guideline divided the country's urban residential natural gas consumption into three levels. The first and second levels of natural gas charges are based on 80 and 95 percent of the average monthly gas use in a fixed residential area. The third level price will be linked and charged for those exceeding the gas use of the second level.

Because different regions have different climate condition, heating supply facilities and distribution systems, local governments have the power to set their gas prices unilaterally.

The guideline requires that all cities with gas supply systems establish the ladder pricing system by 2015.