For a country as natural gas-deprived as China, the resource's low domestic prices are at odds with economic principles.
According to BP Statistical Review of World Energy, the country has only 1.2 per cent of its proved natural gas reserves.
Yet its gas prices were lower than most countries, Beijing University of Petroleum vice-dean Dong Xiucheng said recently.
In 2003, the ex-factory price of gas in Sichuan province was just 46.4 to 75.8 per cent of those in Japan, Europe and North America.
National Development and Reform Commission head of price regulation Zhao Xiaoping was quoted by Xinhua as saying last month that mainland gas prices should be gradually raised.
Subsidisation to the farming sector has much to do with the low prices, as the production of chemicals - mostly fertilisers - accounted for 35 per cent of the national gas consumption in 2003. This compared with 28 per cent for industrial fuel, 24 per cent for city gas and 13 per cent for power generation.
