Tiered tariffs on gas to save usage
Print Edition
CHINA plans to introduce progressive tariffs on natural gas for residential use to conserve energy amid rising demand, but the government assures that bills for the majority of people won’t change.
The system will include three tiers, the National Development and Reform Commission, China’s top planning agency, said yesterday. The first covers use by 80 percent of local households whose prices will be flat while the second covers consumption by the next 15 percent whose prices will grow 20 percent. The last tier covers consumption by 5 percent of households, and prices will increase 50 percent.
Such tiered pricing, already used on electricity and water, will charge more for excess use as the government reforms pricing to encourage conservation of resources.
As the government has long cushioned residential users on prices, it now has to manage consumption better or China will suffer a rising shortfall in electricity and gas in the future, said Chi Guojing, secretary-general of the China Gas Association.
Provincial areas are required to have their respective systems in place by the end of 2015, the NDRC said. Shanghai doesn’t have a timetable yet for its own plan and will hold public hearings, the Shanghai Development and Reform Commission said.
The NDRC said trial programs for progressive pricing in parts of Henan, Jiangsu and Hunan provinces have already reduced gas demand.
China aims to lift the share of gas in its energy supply mix to cut pollution and has provided subsidized and underpriced resources to cushion industrial and residential users from inflation. But that has also led to waste and mounting losses for importers such as PetroChina.
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