Gas prices to more than double for industrial users: ANZ report

LNG exports will displace iron ore as Australia’s major export in coming years, but domestic prices will rise steeply and will harm industrial users, according to a new ANZ report.

The Australian Financial Review and others report that the surge in LNG exports could result in industrial users’ paying over 100 per cent more for gas in the coming 3 – 5 years, with households to see prices will spike by around 30 per cent, according to ANZ.

The bank predicts that the current slump in gas prices will not continue, and growth to pick up considerably as demand from Asia changes.

"Some of the sectors such as chemical [products] and manufacturing will be impacted by this," Daniel Hynes, senior commodity strategist at ANZ, told the ABC.

"There will certainly be ways they can mitigate the risk but certainly, over the next couple of years, as we do see this dramatic change in the pricing system, it will be a bitter pill to swallow."

A big increase in gas prices as several major projects begin exporting has been predicted in numerous analyses over the last few years.

The biggest prices rises for gas are expected to be in Queensland, but the effects felt most keenly in Victoria, according to ANZ's research. 

Manufacturing Australia has proposed a “use it or lose it” policy for gas companies to prevent them from hoarding the resource.

 

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