Analysis on the price status of natural gas and preliminary discussion on its reform direction in China

The gas pricing principles which are carried out in the gas pricing system in today s world include fully costs principle, average profit principle, marginal costs principle reasonably comparing prices principle and supplying-demanding principle, etc. It is well analyzed how the pricing system of natural gas was in the past and is now in today's China. Through the analysis, it is explained how the present pricing system came into being under a certain system. On the basis of the method of determining the prices of natural gas, as a commodity, at every single procedure from the production to the transportation and to the sales, a pricing formula of natural gas is introduced here, having taken into account not only the value of the commodity (natural gas) but competition in the market under government's supervision. It is indicated at last that fully costs principle is available to be carried out in the present pricing system before a real competitive gas market is set up.