Sources of the National Development and Reform Commission (NDRC) say that the policy is now in the final stage of examination.

   China's natural gas market has developed rapidly in recent years, with growth of natural gas supply falling behind the growth of the demand. The phenomenon of tight natural gas supply has occurred in some places in China.

   It is learned that the policy to be published will be divided into four sections: being encouraged, being allowed, being restricted and being prohibited. The policy will encourage oil companies to construct as much as they can natural gas pipelines and construction and development of natural gas for civil use, but will restrict and prohibit such chemical industries as synthetic ammonia and formaldehyde which have natural gas as raw materials.

   According to the "11 Five-Year Program for Energy Development", gas-driven motor vehicles will also be encouraged.

   Industry insiders of oil industry predict that the policy will help strengthen China's control over natural gas resources, help natural gas producing area develop deep processing business, and help curb local random utilization of natural gas project.

   They further predict that the price of natural gas may be raised in near future.

   Natural gas is a kind of energy that reported the fastest growth in the "10 Five-Year Plan" period (2001-2005), averaging 12.63 percent a year; and the output has soared from 27.2 billion cubic meters in 2000 to 49.3 billion cubic meters in 2005.

   According to the "11 Five-Year Program for Energy Development", by 2010, the production of primary energy will reach 2.446 billion tons of standard coal, averaging an annual growth of 3.5 percent. Of this, the proportion of coal, oil, natural gas, nuclear power, hydropower and other renewable energy will be 74.7 percent, 11.3 percent, 5 percent, one percent, 7.5 percent and 0.5 percent respectively.