Price impact uncertain from gas reservation scheme
A federal minister said gas reserves on the east coast would help avoid shortages, but uncertainty remains about how much the plan would lower household prices.
According to the reservation plan, gas exporters will have to reserve 20 percent of their volumes for use in the domestic market.
The scheme will come into force from July 2027 and will apply to three Queensland-based LNG exporters.
Industry Minister Tim Ayres said gas prices would fall as a result of the plan but did not detail what consumers could expect to pay in future.
“We don’t make predictions about specific price levels, but this will deliver the lowest possible price for Australian households and Australian industry,” he told ABC TV on Friday.
The plan will be grandfathered, with the exclusion of gas export contracts signed before the announcement of the reservation plan in late 2025.
The gas industry has criticized the proposal, saying it lacks detail and could lead to a decline in investment.
Senator Ayres said the federal government would work closely with industry on how the plan would work.
“We will be working on these details with industry over the coming months to ensure there is no room for industry to game the process,” he said.
National leader Matt Canavan, who is also a former resources minister, said the government was trying to catch up on gas reserves.
The coalition implemented a policy of gas reserves on the east coast until the 2025 federal elections; This would add an extra 10 to 20 percent to domestic supply in its first year of operation.
“I explain to them what a difference a 20 per cent reservation policy would make when 35 per cent of gas in Eastern Australia is currently supplied to the domestic market,” he told ABC Radio.
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