Adviser tells Beijing not to interfere in power tariffs
Advice includes use of tax revenues and special levies to protect the poor from price rises
Beijing should stop meddling with coal prices and on-grid power tariffs, according to an academic and adviser to the National Energy Administration.
If mainland leaders want to protect the poor from the full brunt of coal and electricity price rises in the future, it should use the resource tax it collects from coal producers, together with a new special levy on producers when coal prices are high, to subsidise state-owned monopoly power distributors.
The distributors should then be asked to absorb losses from tariff concessions to end-users from time to time when coal prices are high, said Lin Boqiang, director of the China Centre for Energy Economics Research at Xiamen University.
Lin, a member of the national energy consultation committee, advises the government on energy pricing reform.
"The government should change its past practice of imposing price ceilings on energy prices," he said.
"Instead, it should use taxation and subsidisation to achieve its objective. This is the practice in developed nations."
Power generators should be allowed to charge reasonable prices on their output, which would allow them to pass on additional costs when coal prices are high, or savings when coal prices are low, Lin said.