Entering into government, the Labour Party expected the increasing cost of living problem but did not expect the dramatic crisis in gas prices Australia is suddenly facing. Amidst supply constraints, local coal-fired station outages and the war in Ukraine, Australia is now experiencing a shortage of gas supplies, pressuring higher prices on petrol with industries warning thousands could lose their jobs and consumers will pay more. Gas prices on the spot market have quadrupled, causing cost pressure crunches on energy-intensive businesses. Whilst such businesses are on cheaper long-term contracts, there exists many risks if prices are not normalised by the time companies come of those contracts.
Government is coming under pressure to ‘do something’, involving legislative action that would force gas producers to divert exports to supply the domestic market. An inevitable move after the 2011 Gillard government granted licenses for gas exports from eastern Australia without any ‘reservation’ provision for domestic use. Ensuring competitive energy inputs into Australia’s industrial sector is crucial in sustaining international competitiveness against foreign players.
Resources Minister Madeleine King and Industry Minister Ed Husic are currently in discussions with large industrial users as well as gas companies.
