| Price regulation aims to solve market failure and reduce transaction costs. It isbased on rules and laws. Price regulation is able to suppress monopoly prices andensure the stability of public goods, but it can’t overcome market inefficiencies and"government failure". Price regulation often deviates from public interest. Natural gasprice regulation is particularly so. The debate on regulation and deregulation bringscontroversy on legislation of price regulation. Under the transformation of China’snatural gas market, legislation of China’s natural gas price regulation requires makingchoices.China government has always imposed strict price regulation on all sectors of thenatural gas industry, which brings a lot of problems to the natural gas market. China’snatural gas price can’t adapt to the changing market, and it can’t connect with theinternational market. China is lack of unified law and regulator of natural gas price,and the pricing mechanism is not reasonable. The remaining pricing policy conceptformed in planned economy period, imperfectly competitive natural gas market andconflict between the new station of natural gas market and the old policies causedinefficient price regulation.Successful foreign legislations and practice of natural gas price regulation bringus inspiration: reform of foreign price regulation took competitive market structure aspremise, relaxed strict price regulation, established a sound legal system of natural gas, established a special natural gas price regulator and used the appropriate pricingmechanism. Foreign legislations and practice can be used in China. However, reformof China’s price regulation should be combined with a detailed analysis of actualsituation.Reform of China’s natural gas price regulation should take competitive naturalgas market as premise, legislation as basis and price marketization as direction. Chinashould promote the fundamental reform of natural gas regulation step by step.Different sectors of natural gas industry have different natures of natural monopolies.China should relax price regulation based on different situations. China’s laws andregulations should include competitive natural gas market rules, price regulation rules,regulators and pricing mechanism. |
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