(Agencies)
Updated: 2008-01-16 17:29

A crackdown on illegal pricing has cut the cost of liquefied natural gas (LNG) in China by up to 19 percent amid official efforts to cool surging inflation, the government said Wednesday.

Related readings:  Price fixers face increased fines  China takes inflation fight to price manipulators  Price manipulation to be punished  China vows to stabilize prices, prevent price hikes

Inflation rose to a monthly rate of 6.9 percent in November, its highest level in 11 years. Authorities blame shortages of pork and grain but also say noodle makers and others are improperly raising consumer prices. LNG is widely used in China for cooking.

Rising consumer prices hit the country's poor majority hardest. Local officials have been ordered to ensure adequate food supplies ahead of the Lunar New Year in February, the most important family holiday of the year.

Investigators found LNG producers and retailers colluded to raise prices or violated government price controls, China's top economic planner, the National Development and Reform Commission (NDRC), said on its website.

Gas producers are the second industry hit by price-fixing claims after the NDRC said in August that noodle makers illegally colluded to push up retail prices by up to 40 percent.

The NDRC statement gave no indication of what penalties gas suppliers might face. The government on Monday raised fines for price-fixing by up to 10 times.

Following the investigation, retail LNG prices fell 19 percent in the northern city of Shijiazhuang, 13 percent in Nanchang in the south and up to 10 percent in other areas, the NDRC said.

The Chinese government froze prices of gasoline and other energy in September. It raised gasoline and diesel prices by almost 10 percent in November to curb demand, but Premier Wen Jiabao said last week that no more rises would be allowed in the near future.

The NDRC announced price controls on a package of products Wednesday. Except LNG, the products also included grain, edible oil, meat, milk and eggs, according to Xinhua, citing a work conference of the NDRC.