Despite plummeting oil prices on world markets, Shanghai has become the first city in the nation to raise its gas prices, by 19 percent effective yesterday.

The prices of natural gas and liquefied petroleum gas, both for home use, were raised from 2.1 yuan ($0.31) to 2.5 yuan per cubic meter, and from 1.05 yuan to 1.25 yuan per cubic meter respectively.

"The adjustment is made in line with the country's energy development strategy and for the purpose of conservation," Wu Zhenguo, vice-director of Shanghai municipal development and reform commission, told a press conference on Friday.

The new pricing system emphasizes energy saving and abolishes the old preferential rule, in which the more gas used, the cheaper the rate.

Wu said the adjustment will not affect the city's low-income families.

Shanghai increased subsidies for low-income families and the unemployed this year and will do so again next year. While residents in most districts pay their gas bills according to use, some in the suburban areas buy gas credits. The maximum amount that can be bought at any one time is 100 cu m.

A resident surnamed Shi arrived at a natural gas recharge outlet on Sixian Road, Songjiang district, before 8 am on Sunday and was surprised to find a queue stretching about 1 km, Shanghai Morning Post reported yesterday.

Shanghai Securities News reported yesterday that other cities like Zhengzhou, Henan province, and Guangzhou, Guangdong province, are also planning gas price hikes.

The Beijing Gas Group, which collects household gas fees, said it had not been informed of any imminent changes to prices.

(china daily, Nov 11, 2008)