Industrial users want gas market to function properly

Concerns by industrial users over supply have been vindicated by the ACCC report on the eastern Australian gas market.

Launched in April last year and releasing its report last week, the ACCC inquiry report found suppliers and pipeline operators abused the uncertainty of supply. Some had previously dismissed their complaints and worries about the effect of large-scale LNG exports coming on stream.

“Dealing with a monopoly is difficult,” one industrial user told The Australian Financial Review.

“The existing regulations certainly do not look after consumers”.

The AFR reports that industrial users want action, by are not confident of seeing this.

This uncertainty is driven by massive LNG developments in Queensland, exposure to international pricing and regulatory uncertainty.

“Industrial gas users in particular have been acutely affected by the transition,” ACCC chairman Rod Sims said in a statement last week.

“The difference between a competitive market and an uncompetitive market in south eastern Australia could be as much as $4 a gigajoule for wholesale gas.”

The Energy Users Association of Australia has requested a roundtable discussion on the issue involving governments, users and producers, and has proposed some gas be set aside for domestic use pre-2020.

Current sore spots also involve tariffs and inflexible arrangements.