Research On Price Regulation Of Chinese Urban Gas Industry

For a long time, urban gas industry has always been a public-spirited utility, being monopolized by state-owned corporation in China. There has been a hot topic about the urban gas industry regulation theory in the research area, and to price regulation study is the gas industry regulation research core content. The gas supply related to the healthy operation of the urban economic and social, in particular, has a vital role in people’s livelihood and stability of its price regulation is of great significance. In recent years, our government has carried out a series of reformation in the urban gas industry regulation system, but the gas price mechanism still exists many problems. Currently, urban gas price formation mechanism of the basic continuation of government pricing model under conditions of planned economy, leading to the gas pricing mechanism unscientific and unreasonable. Meanwhile, the city gas price controls deficiencies. As market economy continues to improve, develop models of the price of natural monopoly industries should be by the government directly priced into the market pricing of combining government guidance pricing mode; Meanwhile, the reform and opening up the price control reform of urban gas industry must gradually adapt to the rules of the WTO, with the international market.This paper, from the angle of the theory of price control, analyzes the price control of urban gas industry necessarily. The urban gas features of network performances and weaken growth of operation cost and regional monopoly of operation and the scarcity of resources determines its natural monopoly, which result in distortions and inefficiency of resources allocation, and the loss of social welfare. Price regulation on gas industry can inhibit the monopoly prices, promote the allocation of resources efficiently, maintain efficiency of social allocation, motivate costs reduction, improve internal productivity and prevent monopolies such as cross-subsidies, in order to promote the healthy development of the gas market. Through the description of pricing mechanism of the process of production, pipeline and sales of urban gas industry in our country, it can be reasoned out that there are four problems of the gas price control.First, owning to asymmetric information regulatory bodies can not supervise the price well. Second, the regulation method is unitary so that resulting in lacking of flexibility. Third, regulation policies are not in place, causing to be "captives" of controlled-sector. Finally, the functions of price controls body are not clear, and legislation is not perfect. At the same time, comparing urban gas price regulation of several developed countries such as United States, Britain, Japan to the one of our country, we sum up foreign advanced experience and gain important enlightenments about the control of gas prices. For non-natural monopoly, government should relax price regulation, introduce competition, formulate scientific price regulation, improve the structure of price and pricing mechanism, establish special regulation institution, and make perfect laws and regulations. On the base of them, according to the situation of China urban gas industry’s price regulation, referring rate of return price regulation model, price-cap regulation model, two pricing, peak-load pricing, we select the variables related to price regulation model designed for urban gas industry. Finally, specific measures to standardize and improve the price regulation of urban industry. First, deregulate gradually and establish market-oriented price system. Moreover, implementing the separation of enterprise from government and establishing an efficient regulatory agency. At last, formulating and improving relevant laws and the price hearing system.In general, the production, pipeline transportation, the sales of urban gas industry are still monopoly.The keys to the reform of the price regulation are that the business separation, deregulation, the introduction of competition and reforming state-owned gas companies in order to achieve real separation of enterprise from government and reform of the regulatory agencies’ management system.