The Chinese government may announce a 10 percent increase in the wholesale price of natural gas this month, said a source with China's largest oil producer.

This would be the second rise in its wholesale price since December 2005 when the National Development and Reform Commission, the nation's top economic planner, raised the price by 50 yuan (US$6.47) to 150 yuan per one thousand cubic meters, an average increase of 10 percent.

A China National Petroleum Corporation official, who spoke on condition of anonymity, gave no further details including the timing of the price increase announcement.

Analysts said China's government-regulated gas price is much lower than the international level.

The Chinese government has been mulling energy price reform in a bid to encourage efficient energy use by companies and individuals. China reduced energy consumption per unit of gross domestic product by 1.2 percent last year, well short of its four percent target.

"The energy price reform is irreversible as current fuel, gas and water prices do not reflect the scarcity of resources," Ma Kai, head of the NDRC, said at a press conference held on the sidelines of the National People's Congress, or parliament, in March.

On Sunday, Beijing raised the price of natural gas for civilian use by 0.15 yuan per cubic meter to 2.05 yuan to encourage energy efficiency.