China starts to raise the electricity prices for industrial and commercial users by 0.3 cents per kilowatt-hour, beginning May 1, to cope with coal prices hike, said the State Development and Reform Commission Saturday.

Electricity prices for agricultural producers and small and medium chemical fertilizer producers will not be affected, said an official with Commission (SDRC).

The household electricity prices will not be adjusted this time either, said the official. According to the current electricity pricing mechanism, hearings will be held before raising the electricity charges for residential users.

The coal prices in China have increased continuously since last June and many electricity generating companies have began to report losses, said the official. The price hike is expected to help generators maintain the normal operation.

Power shortages have become a major issue in many parts of China since 2003. Twenty-four of 31 province-level regions on the Chinese mainland suffered from power shortages in 2004, compared with 19 in 2003.

Previous reports from the planning agencies said China would continue to experience a power shortage this year, possibly of 25 million kilowatts.

Differential electricity prices will be in place this year to guide businesses to use electricity in off-peak hours, said the official. Beijing will increase peak-hour electricity prices to four times the cost of off-peak rates this summer.

(Xinhua News Agency May 1, 2005)