Why Are Natural Gas Prices Rising?

This article, which appeared in the GAO Review, Vol. 18, Issue 4, Fall 1983, describes the reasons for natural gas price increases, the variance of prices from city to city, and the future of gas prices. Recent natural gas price increases have been attributed to gas pricing, regular increases in ceiling prices for the various categories of natural gas, incentive prices for high-cost gas provided by the Natural Gas Policy Act, the depletion of old gas reserves, and agreements between gas producers and gas pipeline operators. Intercity differences in natural gas prices are attributable to transportation costs, the pipelines' cost of gas, and the effect of State regulatory policies. Future gas prices depend largely on national economic conditions and world oil prices.