Open Access

ARTICLE

Heterogeneous Pricing and Affordability of Residential Natural Gas Consumption: Lifestyle-Driven or Income-Determined?

by Bing Wang, Yao Yao, Liting He, Xiangqian Pei

1 School of Energy and Mining Engineering, China University of Mining and Technology-Beijing, Beijing, 100083, China
2 Beijing Key Laboratory for Precise Mining of Intergrown Energy and Resources, China University of Mining and Technology-Beijing, Beijing, 100083, China

* Corresponding Authors: Bing Wang. Email: ;

Energy Engineering 2020, 117(3), 111-128. https://doi.org/10.32604/EE.2020.010474

Received 06 March 2020; Accepted 27 April 2020; Issue published 10 July 2020

Abstract

With the huge increase in natural gas consumption, the distortion of natural gas prices, especially in the residential sector, is prominently shaped into a heavy burden for public finance. Although city gate price and a price linkage mechanism have been established, the price tolerance of residential natural gas should be considered when the price of residential gas fluctuates with the upstream gas price. Determinants of the price affordability of residential natural gas consumption at different economic development levels (Beijing, Nanjing, Zhengzhou) are investigated by field survey and online investigation and analyzed by a factor analysis and discriminant analysis. The results show that most residents are not sensitive to the price of natural gas, and their motivation for substituting gas with other energy is not strong. More than half of the residents have strong natural gas price affordability, while the weakest affordability occurred in Zhengzhou city among the research regions. The income level of the consumers, the convenience and reliability of natural gas, and the duration of natural gas consumption are the top three factors affecting the affordability of natural gas prices for residents. Policy implications are proposed to facilitate the implementation of natural gas price reform.

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