China’s Natural Gas Pricing Mechanism Reform

Since entering the industrial society, in order to pursue rapid economic growth and develop industrial economy, the consumption of energy, especially overuse of high carbon fossil energy, bring a series of problems, the main problem is the global warming caused by greenhouse gases. Recently, most area of our country appear haze weather, especially in Beijing, Hebei, Jiangsu, Zhejiang, haze weather cause serious influence to people’s life, even depriving people’s right of breathing fresh air. These environmental problems are due to the ignoring of environmental protection in the process of economic development. In order to improve the environment quality and back to the word blue sky white clouds, it is necessary to improve the existing energy consumption structure and improve the proportion of clean energy in primary energy.Compared with oil and coal, natural gas have the irreplaceable advantage of high calorific value, low emissions and low poiiution, so ail countries pay more attention to the use of natural gas in various fields.In the period of great development of natural gas industry, the traditional natural gas pricing mechanism is showing more and more disadvantages.The natural gas price are formulated by the national development and reform commission, still belonging the monopoly pricing and lack of market competitiveness. The cost-plus pricing method, which according to the enterprise cost plus a percentage of the profits, have positive effect during a period of gas industry development and promote the natural gas consumption in china. But at this stage, because of the low price, especially the price of important natural gas, the profits of production enterprises are reducing, that lead the short supply of natural gas in recent years. On the other hand, low price leads to the rapid development of natural gas consumption, even appearing the phenomenon of blind demand in some area.In this paper, through using the method of literature review, comparative analysis, factor analysis, experience summary method, statistical methods of investigation and analysis, introduced the world’s major pricing theory and pricing method of natural gas, analyzed the present situation of supply and demand market, listed the factors that affect china’s natural gas pricing. And then, introduced the current pricing mechanism of our country and analyzed the problem of the current natural gas pricing mechanism. And then through the analysis of the other country’s natural gas pricing mechanism, sum up the general law. Finally combining with the actual situation of China’s natural gas market, put forward some related suggestions of gas pricing mechanism. But this paper mainly analyze the natural gas pricing mechanism reform,lack of empirical analysis.because lack of time and energy,I have’t chose a specific natural gas market to do research.We can select one or more mature market to do a further research to put forward more specific suggestions about gas price formation mechanism.