Energy Prices Reforms to be Expanded to Help Control Fuel Consumption
China is planning to speed up reforms on energy prices in their hopes to encourage competition, reduce inefficient fuel consumption and boost gas and oil supply in the country in which a few months ago was named the world’s biggest oil importer.
China is already importing around 60 percent of crude oil for its consumption and is said to see its import bill to reach half a trillion dollars by 2020. And to prevent any unnecessary increases in fuel costs the government will allow a greater role of market forces to control oil consumption. Based on a reform document which stated that the government will be promoting a pricing mechanism that will be wholly decided by the market. The government will be handing over prices that can be set by the market and hopefully push price reforms in other sectors such as oil, natural gas, water, transportation, telecommunications and power. Agricultural prices will also see reforms.
Current gas supply crunch is slowing down the government’s ability of reducing volume of coal that is used for power. And a public outcry is heard in major cities as emissions caused by coal burring is contributing to the heavy smog. A reform in gas prices can unlock the potential of using shale gas as an alternative source of fuel.