Gas plan paying off
A new review finds the Australian Domestic Gas Security Mechanism (ADGSM) has helped lower domestic prices.
The ADGSM was introduced in July 2017 to help guarantee domestic gas supplies. It was created at a time of growing exports and reduced production from gas fields offshore Victoria.
Australian Resources Minister Matt Canavan says the latest review shows that the measures have stabilised the domestic gas market and kept a lid on gas prices.
The review says the competition watchdog the Australian Competition and Consumer Commission (ACCC) and Australia’s energy market bodies - the Australian Energy Market Operator (AEMO) and the Australian Energy Regulator (AER) - all support the findings on ADGSM’s effectiveness.
The stats show gas offers are now half the peak prices of over $20 per gigajoule before the ADGSM was introduced.
“However, I recognise that some businesses are still finding it difficult to get longer term gas offers and that some price offers remain higher than I want to see, especially when international LNG prices are low,” Resources Minister Matt Canavan said.
“That is why we will keep the ADGSM in place until its scheduled end in 2023 and the ACCC will continue to monitor the gas sector out until 2025.
“In addition, I am going to work with states and territories during the next 12 months to consider options to establish a prospective national gas reservation policy. We can’t repeat the mistakes of the past in just letting our gas be shipped overseas with no thought to our domestic requirements.”
The review called on the government to strengthen the ADGSM’s mechanism for securing domestic gas - the Total Market Security Obligation (TMSO).
It also recommends that the ADGSM’s guidelines include the ACCC’s LNG netback price series as a signal of market functioning.