Government mulls over intervention in Australia's gas market – it could mean big changes for consumers
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Here at the SDC, we understand that a lot of our members are on fixed incomes, so we know that any increase in utility costs can put a real strain on your budget.
That's why we were pleased to hear that the Labor Party is considering intervention in Australia's gas market, in an effort to bring down soaring energy costs.
Under the proposals being discussed by the Labor Party, petrol companies could anticipate some price restrictions.
In its first budget, the Albanese government estimated that gas prices would climb by 44 per cent over the following 18 months and that electricity costs would rise by 56 per cent over the following two years.
When questioned on Sunday about when he thought power bills would come down, Treasurer Jim Chalmers couldn’t give an accurate estimate.
However, he claimed that the government was devising a voluntary code of conduct for the gas industry in an attempt to acquire more gas reserves and obtain control over prices.
Mr Chalmers also revealed that one of the interventions that the government is looking at is making price caps mandatory for petrol businesses in order to control the cost they charge for their goods.
However, the government has been urged to move swiftly if it intends to engage in the market as new contracts with gas companies must be completed by the end of November, according to the chairman of the Australian Energy Regulator.
Additionally, Rod Sims, a former chair of the Australian Competition and Consumer Commission, has encouraged the federal government to use export limitations as leverage to force gas companies to divert enough supply to lower costs.
Mr Chalmers said that while they take Mr Sims’ proposals very seriously, they still need to weigh the pros and cons between doing so and keeping the commitments the Labor government made to voters.
The treasurer remarked: 'We obviously acknowledge that very high gas prices are putting extreme pressure on Australians and on Australian industry.'
'We do want to make sure that Australians get a good return for their resources, we need to balance that against the investment that’s been made into the sector.'
To increase revenue from gas companies, the Treasurer hinted that the government would also consider boosting the petroleum resource rent tax (PRRT).
Prior to the May elections, the present administration had a goal to cut average annual energy bills for homes and businesses by $275 by 2025.
It should be noted that Prime Minister Anthony Albanese has pointed the finger at the Ukrainian conflict and the previous Coalition for the rising costs of petrol.
‘We understand that there’s enormous pressure on people’s budgets as a result of the Russian invasion of Ukraine, but also as a result of the wasted decade when we had four gigawatts of energy leave the system and only one-gigawatt return.’ Mr Albanese disclosed.
‘We’ll examine what we can do to take pressure off energy prices, as we already have done in seeking agreement from the gas producers.’
According to reports, former Prime Minister Scott Morrison allegedly kept the information about the anticipated rise in energy prices confidential until after the election.
Frontbenchers for Labor have criticised the Morrison administration for doing this.
However, Michaelia Cash, a spokesman for the Opposition, confirmed the assertion, cautioning against the implementation of price limits and arguing that Labor should instead concentrate on accumulating greater gas reserves.
Ms Cash said that a price cap would only serve to deter players from the increasing supply.
‘Where is their plan to bring on supply? There is none,' she pointed out.
Let’s hope this is the last time Australians endure a prolonged period of high energy prices.
What are your thoughts on this? Do you think it's a good idea to introduce price caps on utilities? Let us know in the comments below.
That's why we were pleased to hear that the Labor Party is considering intervention in Australia's gas market, in an effort to bring down soaring energy costs.
Under the proposals being discussed by the Labor Party, petrol companies could anticipate some price restrictions.
In its first budget, the Albanese government estimated that gas prices would climb by 44 per cent over the following 18 months and that electricity costs would rise by 56 per cent over the following two years.
When questioned on Sunday about when he thought power bills would come down, Treasurer Jim Chalmers couldn’t give an accurate estimate.
According to Treasurer Jim Chalmers, the government is considering intervening in the petrol market to lower prices. Credit: NCA NewsWire / Damian Shaw.
However, he claimed that the government was devising a voluntary code of conduct for the gas industry in an attempt to acquire more gas reserves and obtain control over prices.
Mr Chalmers also revealed that one of the interventions that the government is looking at is making price caps mandatory for petrol businesses in order to control the cost they charge for their goods.
However, the government has been urged to move swiftly if it intends to engage in the market as new contracts with gas companies must be completed by the end of November, according to the chairman of the Australian Energy Regulator.
Additionally, Rod Sims, a former chair of the Australian Competition and Consumer Commission, has encouraged the federal government to use export limitations as leverage to force gas companies to divert enough supply to lower costs.
Mr Chalmers said that while they take Mr Sims’ proposals very seriously, they still need to weigh the pros and cons between doing so and keeping the commitments the Labor government made to voters.
The treasurer remarked: 'We obviously acknowledge that very high gas prices are putting extreme pressure on Australians and on Australian industry.'
'We do want to make sure that Australians get a good return for their resources, we need to balance that against the investment that’s been made into the sector.'
To increase revenue from gas companies, the Treasurer hinted that the government would also consider boosting the petroleum resource rent tax (PRRT).
Prior to the May elections, the present administration had a goal to cut average annual energy bills for homes and businesses by $275 by 2025.
It should be noted that Prime Minister Anthony Albanese has pointed the finger at the Ukrainian conflict and the previous Coalition for the rising costs of petrol.
‘We understand that there’s enormous pressure on people’s budgets as a result of the Russian invasion of Ukraine, but also as a result of the wasted decade when we had four gigawatts of energy leave the system and only one-gigawatt return.’ Mr Albanese disclosed.
‘We’ll examine what we can do to take pressure off energy prices, as we already have done in seeking agreement from the gas producers.’
The war in Ukraine and the previous Coalition government, according to Prime Minister Anthony Albanese, are to blame for the rise in energy prices. Credit: NCA NewsWire / Damian Shaw.
According to reports, former Prime Minister Scott Morrison allegedly kept the information about the anticipated rise in energy prices confidential until after the election.
Frontbenchers for Labor have criticised the Morrison administration for doing this.
However, Michaelia Cash, a spokesman for the Opposition, confirmed the assertion, cautioning against the implementation of price limits and arguing that Labor should instead concentrate on accumulating greater gas reserves.
Ms Cash said that a price cap would only serve to deter players from the increasing supply.
‘Where is their plan to bring on supply? There is none,' she pointed out.
Let’s hope this is the last time Australians endure a prolonged period of high energy prices.
What are your thoughts on this? Do you think it's a good idea to introduce price caps on utilities? Let us know in the comments below.
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