The Office of the National Energy Leading Group announced on
Monday a draft of the upcoming energy law in order to seek public
opinions through the media and the Internet. The new law is
expected to establish a pricing system based on market relations
within the scope of governmental control.
The draft states that the government would establish a pricing
system "following principles that reflect supply and demand, energy
efficiency and incorporate environmental costs". If passed, the
government would relax price controls for energy products connected
to consumers' lifestyles, including refined oil products.
"The draft signifies that the energy pricing system reform will
be affirmed by law," said Lin Boqiang, Director of the China Center
for Energy Economics Research in Xiamen University. He added that
although there were few technical concerns over the pricing system,
it was hard to predict when the law would be passed and
Additionally, the draft stipulates that transportation prices
for industries controlling natural resources and the service prices
for important products covering public interests would be
controlled by the government. The government would foster and
regulate the energy market, encourage all kinds of venture
capitalists to invest in energy exploitation and gradually
introduce a pricing system that would be conducive to lower cost,
higher efficiency, resource saving and have less impact on the
According to energy experts, the upcoming law will be a
fundamental directive covering energy resources but it would only
provide general guidelines in the energy sector rather than
There have been rumors circulating about establishing a specific
ministry to coordinate energy management. The second chapter of the
draft deliberates on the issue of comprehensive energy management
but it doesn't mention forming a new ministry.
According to the draft, energy authorities under the State
Council would coordinate national energy management policy, while
other relevant departments would be in charge of all other
pertinent energy issues within their jurisdiction.
China will establish an energy reserve system to cope with the
critical energy conservation situation that threatens the country's
energy security, notes the draft.
Regarding environmental concerns, the draft suggests that
enterprises which over-exploit energy resources would face a fine
up to five times their illegal gains.
The 34-page energy law draft comprises 15 chapters and 140
articles. Sources revealed that the original plan intended that the
draft would be submitted to the State Council by the end of this
year and then the National People's Congress next year for
This is the fifth edition of the energy law. Formal requests for
public opinions end on February 1, 2008.
Ye Rongsi, the deputy head of the team responsible for drafting
the law, said that the earliest possible date for China's Energy
Law to go into effect would be 2009.
(China.org.cn by Huang Shan, December 4, 2007)