Energy affordability and reliability are of the highest priority for the Australian Government. Gas is an important part of the energy mix, including its use in electricity generation. Domestic gas prices have increased for residential and industrial customers across the east coast. Contributing factors for high domestic gas prices include LNG exports linking the domestic gas price to the export market, increased demand for gas in electricity generation (due to closure of coal fired electricity plants like Hazelwood in Victoria) and lower than expected levels of gas production.
Other contributing factors include higher development and production costs for new gas resources, and bans, moratoria and regulatory uncertainty for onshore gas development in some states and territories. These factors have all contributed to tighter gas supply and higher domestic prices.
The Australian Government introduced the Australian Domestic Gas Security Mechanism in 2017, a system to restrict liquefied gas exports in specific circumstances to ensure there is a secure and adequate supply of gas available to meet Australian domestic needs. This mechanism will be used if a domestic shortfall is forecast by the Commonwealth Minster for Resources and Northern Australia, in circumstances where gas exporters are drawing more supply from the domestic market than they are putting back in.
Find out what the Government is doing to address gas prices.