Social Welfare Research On China’s Natural Gas Industry Deregulation

In order to ensure the natural gas market’s prosperous development and stimulate the optimization of our energy structure,China has introduced some relative policies but still needs to focus on the pricing mechanism and the pipeline system in natural gas industry.Thus,research on the reform orientation of natural gas industry regulation is meaningful for development of natural gas market in China.However,few researchers focus on this field and most of them tend to use the qualitative analysis which is subjective and one-sided.Therefore,this research analyzes the natural gas industry quantitively and discusses the deregulation of natural gas industrial reforms in China.The foundations of this research are features of natural gas industry marketization in developed countries and problems in current China’s natural gas market.We offer three stages in future marketization of natural gas industry in China and then analyze pricing reforms and the third party access by building economic models,then comparing upstream and downstream profits and social welfare in different scenarios.Results show that intense price competition and opened upstream market may not exert positive effects on market development in current market structure in China.Policies such as tax and subsidy could help perfect the regulation system of natural gas industry and open the market step by step.In addition,the third party access benefits both the upstream and downstream companies and making dynamic and suitable transportation charges can raise total profit of the natural gas industry chain.