ACCC report predicts high prices
The ACCC says high domestic gas prices are here to stay.
The competition regulator says industrial customers will continue experiencing prices two to three times higher than historical levels.
Despite an improved gas supply outlook for east coast markets in 2019, the Australian Competition and Consumer Commission (ACCC) says prices will only be reduced materially beyond 2019 if gas supply increases significantly.
This would include an expansion of unconventional gas fields.
“We continue to urge state governments to adopt policies that consider and manage the risks of individual gas development projects, rather than implementing blanket moratoria and regulatory restrictions,” the ACCC said in its fourth interim report on wholesale gas supply arrangements.
It says many industrial users of gas face difficult long-term investment decisions and questions about their operations.
Treasurer Scott Morrison says it shows the Turnbull government’s policies are working.
“That heads of agreement that was signed between the commonwealth and those suppliers has been producing the results that we sought to achieve,” Mr Morrison said.
“It is clear that without this work being done by the ACCC, initiated as part of our plan for more reliable energy and lower cost energy, whether it’s for household consumers or commercial industrial users – what we’ve been doing with the gas inquiry has been playing a critical role.”
But Labor says the ACCC report actually confirms that “Australia’s largest ever gas crisis” will continue.
“The ACCC’s July 2018 gas inquiry interim report released today highlights the high prices still being paid by Australian industry, saying ‘gas users are still finding market conditions extremely challenging as gas prices remain at two to three times higher than historical levels’,” Mark Butler, the shadow energy minister, said in a joint statement with Jason Clare, the shadow trade minister.
“The gas crisis isn’t over, Australian manufacturers are paying the cost and workers will pay the price.”