Government threatens gas producers, but little more

By Peter Roberts

The federal government is talking big in facing up to price gouging by gas producers, but is studiously avoiding tough action that would actually make a difference.

Ministers have been facing the media talking up a Heads of Agreement that has brought in 157 petajoules of additional supply to the east coast market.

Industry minister Ed Husic was the latest talking tough but failing to brandish the big stick in an interview Kieran Gilbert on Sky News.

He started by saying that that the gas companies were not listening, had been ‘sucking up an Australian resource and selling it at phenomenal prices’, and could ‘either do the right thing by the country or they can continue to be greedy. It’s Team Australia or Team greed’.

Husic responded to all this greed: “The important thing about the Heads of Agreement is that that it filled the need for more supply, which was critical.

“Prices will go crazy if we don’t get that supply, and the concern from the ACCC is that we’d be facing a massive shortfall, and the Heads of Agreement brought in 157 petajoules of additional supply, so …that ensures that we will not pay more than export prices.”

So domestic prices will not go higher than the sky high global price driven by the Russian invasion of Ukraine, but not necessarily go down.

But wait the government has done more – said Husic – they are looking at potential reforms for the Code of Conduct that governs the industry.

Gilbert pointed out that the Australian Workers Union national secretary Daniel Walton saw the Heads of Agreement as a dud deal for manufacturers.

Husic: “…I can understand why Dan Walton on behalf of his members and I can certainly appreciate why manufacturers expect more, and we do need to deliver and the gas companies need to hear that message too.”

But still no sign of a big stick, say reserving a percentage of Australian gas for Australian customers…something that would genuinely have a chance of driving down domestic prices.

So the gas companies can continue to make windfall profits and ministers will continue to keep on talking.

Said Husic: “We cannot be more clear: if these gas companies think that this is the end of the story and the heads of agreement is all done and dusted, they’ve got another thing coming, I can tell you that.”

Take that!

Picture: Ed Husic