22 April 2016
Media Release - #2016041, 2016

In the role of: Minister for Small Business and Assistant Treasurer [21 September 2015 - 18 July 2016]

Release of ACCC gas report welcomed

Joint media release with
The Hon Josh Frydenberg MP
Minister for Resources, Energy and Northern Australia

The Government welcomes the release of the Australian Competition and Consumer Commission's (ACCC) report into the competitiveness of wholesale gas prices in Eastern and Southern Australia.

Australia's east coast gas market has undergone substantial change, notably with the development of a liquefied natural gas export industry in Queensland.

The Government tasked the ACCC to consider the efficiency and effectiveness of the east coast gas market in response to concerns raised about the availability and price of gas in that market and the market’s transparency. Several reviews, including the Harper Competition Review, had also recommended a detailed competition consideration take place.

The report, prepared by the ACCC, makes a number of key findings including that:

  • more supply and an increased diversity of suppliers are important for the market's future competitiveness;
  • regulatory restrictions and uncertainty are hindering the development of new gas;
  • requiring industry to provide better information about price and availability of supply would increase transparency and benefit consumers; and
  • gas pipeline regulation is not fit-for-purpose and does not constrain the exercise of market power.

The report's recommendations include that the risks from gas supply projects should be managed on a case-by-case basis, rather than using blanket moratoria, and that a new test for the regulation of pipelines be implemented.

"The confidential nature of contracts, prices and negotiations had hampered the ability of previous reviews to disentangle and test the assertions as to how the market was operating. The ACCC was able to use its powers under the Competition and Consumer Act to compel information, documents and evidence and to come to an informed, considered and evidence-based report," Minister O’Dwyer said.

"By putting more facts on the table, the report has made an important contribution to this debate. It makes clear that unless the Commonwealth and State governments work together to address supply-side constraints, consumers and industry will bear the cost of higher gas prices and less reliable supply. To this end I convened a video-conference with my colleagues on the COAG Energy Council to discuss next steps as we consider the report’s recommendations ahead of our next formal meeting in July," Minister Frydenberg said.

The report can be found on the Australian Competition and Consumer Commission website.