The National Development and Reform Commission (NDRC) on December 26 initiated a pilot program in Guangdong Province and Guangxi Zhuang Autonomous Region to link natural gas prices with import prices of alternative fuels.

The NDRC said it will introduce a "gate price" ceiling for each province, and make regular adjustments to the "gate price" according to import prices of alternative fuels.

The government currently sets natural gas prices largely according to domestic production costs, but the method has been less reasonable as the country becomes more dependent on imports for natural gas.

"The goal of the reform is to eventually build a market-based pricing system and encourage efficient use of natural gas," said the NDRC.