BY ELIZABETH FABRI
THE Turnbull Government has ordered the Australian Competition and Consumer Commission (ACCC) to begin a three year investigation into the East Coast wholesale gas market in an effort to create greater transparency and fairness for customers.
Announced on 19 April, following a meeting between Prime Minister Malcolm Turnbull, Australia’s liquefied natural gas executives and the Australian Energy Market Operator (AEMO), the inquiry will examine how gas suppliers will make more gas available to domestic gas users, and the effect this has on overall market dynamics.
Mr Turnbull said the new measure would “shine light” on transactions with the Australian gas market and help it operate more efficiently.
“This work will run over three years, with regular public reporting, and will give the ACCC and market participants a complete picture of the gas market,” Mr Turnbull said.
The Prime Minister however said while this progress was “encouraging” there was still a lot more that needed to be done.
“The Government remains concerned that the east coast export LNG operators have not yet clearly articulated how Australian households and business will get adequate supply at reasonable prices,” he said.
“The Government has asked the exporters to provide further information, in the context of possible regulatory options to address the short term market issues.”
Treasurer Scott Morrison said the consumer watchdog’s monitoring would hold gas suppliers accountable to make more gas available to the domestic market, and would propose a number of measures to address any issues found.
“As part of this work, the ACCC will scrutinise the pricing, volume and availability of domestic gas compared to gas that is being exported,” Mr Morrison said. “The ACCC will also examine other parts of the gas supply chain, including storage, transportation and processing of gas, to ensure that actions taken by other industry participants do not undermine the ability of all Australians to access reliable, secure and affordable gas — whether it’s for the generation of electricity, or whether it’s for industry, families and households.”
ACCC chairman Rod Sims said the investigation was an important part of the Government’s plan to make more affordable gas available to industry and consumers.
“Importantly, the inquiry will help verify progress in changes in domestic gas supply and monitor commitments made by gas suppliers to the Government to make more gas available and also ensure gas is delivered at times of peak electricity demand,” Mr Sims said.
The inquiry followed a 2015 ACCC investigation into the east coast gas market which determined there was urgent need for new gas supply from various sources to support the domestic market.
ACCC will release public reports every six months, with its first report due in October, and final report due in 2020.