The head of the ACCC says the gas industry has mislead governments into approving projects that kill Australian jobs.

Consumer watchdog chairman Rod Sims says the approval of massive gas export projects have led to soaring power prices, wiping out companies and jobs.

“A lot of the things that Australian governments, politicians, were told when those projects went ahead, turned out not to be true,” the Australian Competition and Consumer Commission (ACCC) chairman has told the ABC.

“So I think the gas industry as a whole certainly has to carry a lot of blame for the mess. And it is a mess that we are in; the companies that are closing down and [then] the trouble this is causing for Australian manufacturing and Australian jobs.

“The gas companies assured governments that the local market would be fine, that prices wouldn't go up. And that turned out not to be the case.”

The gas lobby APPEA has slammed the criticisms.

It says that coal seam gas fields developed for the export program have seen a net increase in domestic supply.

“The ACCC itself put this surplus at 138 petajoules or over a quarter of existing domestic demand on the east coast,” Andrew McConville, the chief executive of the Australian Petroleum Production and Exploration Association (APPEA), said in a statement.

The APPEA says the industry is still not big enough to serve Australia, calling moratoriums on new gas fields in New South Wales and Victoria the “key culprits” in any domestic shortage.

Many have suggested a gas reservation policy could help retain affordable gas for the domestic market.

“There is just no easy answer to this,” Mr Sims said in regard to a reservation policy.

“[Major LNG projects] have got contracts in place internationally and you have to be really careful if you upset those.

“In a sense, the horse has bolted. Putting the horse back in the stable is going to be very difficult.”

Australia is currently in the strange position of being the biggest exporter of gas in the world, but needing to import large quantities of gas to cope with a looming domestic shortfall.

Plans have been approved for a new gas import terminal at Port Kembla which could supply 75 per cent of NSW demand.