Abstract: Natural gas transmission and distribution is of a very high level of natural monopoly，which provides the basis for economies of scale but on the other hand has some drawbacks.For the purposes of consumer rights and sustainable development of natural gas industry，effective supervision must be implemented by government.Based on natural monopoly theory and natural gas supervision policies overseas，this paper suggests that supervision of natural gas transmission and distribution in China should cover the following aspects：establishment of natural gas network access system，restriction on pipeline transportation prices and franchise to natural gas transmission and distribution.Strategies of effective supervision are also suggested.

Key words: natural gas, transmission and distribution, natural monopoly, government supervision, strategies