Low oil prices have become an obstacle to further reforms of China's natural gas price regime designed to encourage gas use. The next step in the process is establishing a single price for non-residential and residential sales. Right now, households pay less than industry, and the government had planned to raise residential prices to the same level. But "if the gas price is higher than the oil price, who will use gas?" a domestic gas trader asks. Moreover, households are already paying more for food, with prices of some basic products at record highs, and raising gas prices at the same time could risk a public backlash. City-gate prices for residential users are on average 0.5 yuan ($0.08) per cubic meter lower than non-residential prices, and household consumption accounts for about 20% of the total. The National Development and Reform Commission (NDRC) merged the two tiers of its gas-pricing system for industrial consumers last April by sharply reducing the higher bracket by 17.5% (WGI Mar.4'15). In a second move last November, it slashed city-gate prices for industrial consumers by almost 30% (WGI Nov.25' 15).
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