Turnbull government defends action on gas prices

Turnbull government defends action on gas prices


The Federal Government has defended its move to place export restrictions on domestic gas supplies, after the Opposition questioned the claim that gas prices could be reduced by half under the new measures.

The government has moved to remedy the current situation, wherein the vast majority of Australia’s domestic gas is shipped overseas, by placing restrictions on exports until necessary levels of domestic production have been satisfied.

The current outpouring of exports has been singled out as a big factor behind rapidly climbing gas prices in recent months. Prime Minister Malcolm Turnbull claims that the actions being taken by his government could save up to 65,000 jobs and reduce prices by up to half.

“It will be cheaper than the prices that are being offered now,” he told ABC Radio. “People in Australia are being offered prices of $20 a gigajoule, it should be around half that.”

These comments were questioned by Opposition Leader Bill Shorten, who called for a second opinion on the impact of the government’s movements.

“If Mr Turnbull’s promised Australians that gas prices will halve, I want to hear that promise from the gas companies,” he said.

“Without the gas companies confirming that, what Mr Turnbull is saying is just hot air, just words.”

Turnbull clarified his comments following the initial reaction to his claims, arguing that he never claimed that all prices would be halved. The Prime Minister asserts that he was referring to the reduction in price of the inflated wholesale contracts offered to manufacturers.

“If the domestic market is adequately supplied — and that’s what the export measures I have announced are going to do — then the price should be around half that or less,” he said.

“The measures the Government has announced will put downward pressure on the wholesale price of gas and that is a portion of [people’s] bills, but only part of it.”

Energy Minister Josh Frydenberg was quick to support the argument, stating that, while they could provide no assurances on prices, the Prime Minister had been lamenting the facts of the situation rather than providing concrete predictions.

“What he was pointing out was the fact that some energy users are being quoted for gas at $20 a gigajoule, which is double what you should be paying,” Fryenberg said.

“We can’t guarantee price in relation to any industry but what we can guarantee is this mechanism will put more gas into domestic market, [and we] won’t have the predicted shortfalls as the AEMO has indicated.”