Radio Free Asia: China's Gas Price Break Proves Costly

China has slashed natural gas prices to boost consumption of the cleaner-burning fuel, but the move may come as a shock to producers who have been struggling with low demand growth this year.

On Nov. 20, China's top planning agency cut wholesale gas prices for non-residential users by an average of 28 percent, reducing the charge by 0.7 yuan (U.S. 11 cents) per cubic meter.

The price break will save industrial and commercial consumers over 43 billion yuan (U.S. $6.7 billion) annually, the National Development and Reform Commission (NDRC) said.

The NDRC has been under pressure for months to revise its policies as high gas prices have discouraged demand and efforts to curb reliance on high-polluting coal.

While coal prices have plunged by over 20 percent in the past year, the growth of gas use has slumped to 2.1 percent in the first half from 5.6 percent last year and a 13-percent annual pace in 2012 and 2013. MORE