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At the \"Third China Financial Situation and Industrial Development In-depth Analysis\" conference held on March 29, Deng Yusong, head of the Comprehensive Research Office at the Institute of Market Economy of the Development Research Center of the State Council, said that in the context of a significant short-term decline in energy demand, it is necessary to take advantage of the current situation of oversupply in the energy market to accelerate the adjustment of its structure and further improve the mechanism for determining energy prices. Since the second half of 2008, the sharp slowdown in the growth rate of energy demand has become the main factor affecting energy supply and demand as well as price changes. Data shows that industrial electricity consumption has been declining rapidly for some time now. According to the data on the operation of the power industry for January and February 2009 released by the **Development and Reform Commission, industrial electricity consumption declined by 10.4% compared to the previous year, whereas it had increased by 11.2% in the same period last year. Industrial electricity consumption accounts for over 70% of the total electricity consumption in the country, and fluctuations in industrial electricity use are the main cause of variations in China’s electricity demand. Currently, industrial production is under the dual pressure of a declining economy both at home and abroad, and the growth rate of industrial electricity consumption will continue to decline. The decline in international crude oil prices from their high levels is due to reduced demand for oil resulting from the slowdown in world economic growth; this is the direct cause of the sharp drop in international oil prices since the second half of 2008. With global oil demand slowing down significantly, or even showing negative growth, it will restrain rising oil prices. Although crude oil prices have risen recently, as long as the world economy as a whole remains under the shadow of the crisis, there will be no sharp increase in oil demand, and it will be difficult for oil prices to rise significantly and rapidly. In light of this, Deng Yusong said that the significant drop in energy prices and the substantial changes in the energy supply and demand situation have created favorable conditions for further advancing energy reform. Energy price reform is of paramount importance in achieving energy development goals; it is through energy prices that market supply and demand can be kept relatively stable, the energy structure can be continuously optimized, and efforts to reduce energy consumption and emissions can be advanced steadily. By properly managing the relationships among various interest groups and taking into full account the capacity of all sectors of society to bear the changes, energy price reforms should be advanced in a proactive and cautious manner, with the aim of gradually establishing a pricing mechanism that reflects the scarcity of resources, market supply and demand dynamics, and environmental costs. Deng Yusong suggested taking advantage of the short-term oversupply in the energy market to accelerate the adjustment of the energy market structure and further improve the mechanism for setting energy prices. Deepen coal price reform and fully achieve marketization ； Advance electricity price reform, gradually ensuring that generation and sales prices are determined by market competition, while transmission and distribution prices are regulated ； Gradually improve the pricing mechanisms for oil and natural gas to reflect changes in international market prices as well as supply and demand conditions in the domestic market in a timely manner.