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Australia Eyes Domestic Gas Price Cap

NATURAL GAS

The Australian government is considering several options to combat surging domestic energy costs including a gas price cap for domestic sales.

  • The government is studying potential gas market interventions after concerns that a rush to lift LNG exports has left consumes facing a fuel shortfall.
  • Intervention to encourage LNG exporters to deliver more gas for domestic use is seen to be unlikely to have any major impact on global supply or prices.
  • In September Australia signed an agreement with some producers to boost gas volumes for local consumers, as Australia estimates a gas supply deficit for the eastern part of the country for 2023.
  • A budget delivered in October estimated Australia’s power and gas prices will rise by up to 20% in the year through June 2023, while rising even sharper the year after.
  • At the beginning of this year, the Australian Competition and Consumer Commission warned Australia should tighten measures to curb natural gas exports from their largest supplier to avoid a fuel crunch.
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