Latest ACCC Report Highlights Ongoing Domestic Gas Market Issues Despite Assurances From Producers

Latest ACCC Report Highlights Ongoing Domestic Gas Market Issues Despite Assurances From Producers

Emily Wood | January 30, 2023

The latest Australian Competition and Consumer Commission (ACCC) Gas Inquiry Report once again reveals a dysfunctional domestic gas market with escalating prices and a potential gas shortfall despite ongoing reassurance from gas producers that prices offered are reasonable and there is no gas shortage, said Energy Users’ Association of Australia (EUAA).

“Australian domestic energy consumers continue to face challenging market conditions which is highlighted in the latest ACCC report,” said EUAA Chief Executive Officer, Mr Andrew Richards.

“This report reaffirms the need for new ACCC powers, an emergency price cap in gas markets and a mandatory code of conduct for the gas industry that will result in a fair and balanced domestic gas market for all participants.”

The ACCC report identifies that the vast majority of contracted and uncontracted gas reserves are in a cost range of between $5Gj to $10Gj meaning even with an emergency price cap of $12Gj, most gas will be sold at a healthy margin and no gas will be sold at a loss.

“It is well within the power of the gas industry to solve the domestic gas crisis by offering sufficient quantities of gas at fair and reasonable prices,” said Mr Richards.

“If they had done that 12 months ago there would have been no need for governments and regulators to take the actions they have been forced to take. It’s not too late. Once again we call on the gas industry to balance the national interest with the interests of their shareholders and work with governments and energy users to repair the damage that has been done to the economy, to households and to their reputation.”

“Australia is fortunate to have plentiful resources available. Ensuring domestic consumers are supplied fairly is critical to our economic success. It is clear from this latest report that doing so will not be at the expense of our international contracts.”

Gas is a critical input in our society. It is used to make essential goods and services, it is used to make wind towers, concrete and the steel for new interconnectors. It is used to make food, glass, bricks, plastic and paper products.

Gas is also an input into electricity generation that often sets the cost of electricity as it is used to fill the peaks in demand. There is not a commercially viable alternative to using gas for these processes at present.

The EUAA is the peak body representing Australian industrial and commercial energy users. EUAA membership covers a broad cross section of the Australian economy including significant retail, manufacturing and materials processing industries.  Combined EUAA members employ over one million Australians, pay annual energy bills in the many billions of dollars and support the development of a lasting national energy and climate change plan that puts downward pressure on electricity and gas costs.

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Media Contact: Emily Wood 0421 042 121

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