EUAA throws support behind gas price cap

Gas flume at night (gas code)
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Peak body Energy Users’ Association of Australia (EUAA) says energy ministers’ comments about addressing rising gas prices have brought hope to consumers.

“We are encouraged that energy ministers’ have not been hoodwinked and they understand that the gas industry is overcharging Australian consumers,” EUAA CEO Andrew Richards said.

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“We need them to be unflinching in their resolve to reign in the profiteering of the gas industry and to protect Australian households and business. We urge ministers to work together and act for all Australians.”

In the past 10 months, gas prices have skyrocketed to levels never seen before. High gas prices have also pushed up electricity prices due to a complex series of issues that required additional gas for electricity generation.

“Many industrial energy users who are re-contracting for gas and electricity can testify to the spike in energy prices with many seeing a 300% increase in the price of gas compared to just 12 months ago,” Richards said.

Former ACCC chair Rod Sims also said, “We need to get the east coast liquefied natural gas (LNG) producers to supply sufficient gas to the east coast at prices below $10/Gj. They would continue to make a profit at those prices, albeit much less than otherwise. As it happens, the Commonwealth has the power to get such commitments, because it has the power to stop exports. That power gives it complete leverage.”

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With domestic gas volumes at a fraction (less than 20%) of international sales, the EUAA said a temporary cap on the domestic wholesale price of gas would still deliver very good returns to the gas industry and only have a marginal impact on overall revenue and profit, which are expected to remain at “eye-wateringly good” levels for years to come. 

“The EUAA is in favour of a temporary cap on wholesale gas prices as one option to solve this crisis,” Richards said. 

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