China Releases Energy Law Draft

Wants more market-based pricing mechanism

China released the draft version of a long-awaited energy law on Dec. 3, calling for more environment-friendly energy policies and a more market-based pricing mechanism. The law aims to "construct a stable, economical, clean and sustainable energy supply and service system, increase energy efficiency and safeguard energy security," said the draft. It was posted on the website of Office of the National Energy Leading Group, and will solicit opinions from the public until February 1.

China will establish energy pricing systems mainly determined by market forces but government controls will continue to play a role, it said. It added that pricing should reflect "the scarcity of resources and costs of damaging the environment."

According to the draft law, the government will also adopt tax policies encouraging development and use of renewable energy, energy-saving products and imports of related technologies. It will improve the energy resource tax regime and expand consumption taxes to adjust energy consumption and promote efficient use.

Last month, Beijing raised retail prices of gasoline, diesel oil, and aviation kerosene by around 10% to entice refiners to release more product to ease a wave of nation-wide fuel shortage. China currently maintains strict control over prices as it fears higher prices may lead to a spike in inflation, already at its highest level in more than a decade, and set off social unrest.

Copyright Agence France-Presse, 2007

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish