Today I have directed the Australian Competition and Consumer Commission (ACCC) to monitor the wholesale gas market in Eastern Australia using its inquiry powers.
This is the latest action in the Turnbull Government’s plan to ensure Australians have access to affordable and reliable energy and follows last year’s ACCC inquiry into the competitiveness of wholesale gas prices in Eastern and Southern Australia.
The inquiry will run over three years, with regular reporting, and will look into:
- measures to improve the transparency of gas supply arrangements in Australia;
- the supply by persons in the gas industry (including without limitation gas producers and gas retailers) of, and demand for, natural gas extracted or produced in Australia, or imported into Australia; and
- the supply of, and demand for, Australian natural gas transport by persons in the gas industry (including without limitation gas pipeline operators and other persons who have access to pipeline capacity).
The ACCC’s inquiry powers will allow it to compulsorily acquire information, providing the Government and the public with a complete picture of how the gas market operates, including prices and volumes. This will increase transparency, facilitate competition and ensure the gas market is operating well for all Australians.
This monitoring will hold the gas suppliers to account with respect to their commitments to make more gas available to the domestic market and LNG exporters with respect to their commitment to be net domestic gas contributors.
The ACCC will be able to identify impediments to efficient supply and where the use of market power may exist – and propose 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.
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.
The ACCC will release regular six monthly reports to the public on the state of the gas market, including the prices and terms on which it is being offered, with a final report in 2020. This will shed light on whether actions taken by all gas suppliers are effective in ensuring the supply of gas in the domestic market.
The ACCC will work with other relevant agencies, including the Australian Energy Regulator, the Australian Energy Market Commission and the Australian Energy Market Operator.
At the same time, the ACCC will work with Dr Mike Vertigan to refine longer term transparency measures to address current opaqueness in the gas market and support longer term market stability in the domestic supply and consumption of gas. The scope of this work will cover the full supply chain, including producers, transporters and retailers.