AUSTRALIA (Commonwealth Union)_ The government’s plans to freeze gas and coal prices for a year have been met with criticism from the gas business, according to Australian Prime Minister Anthony Albanese, who has indicated he will meet with members of the gas industry.
To stop the spiralling energy prices brought on by the conflict in Ukraine, PM Albanese, the leader of the center-left Labor Party, intends to enact legislation this week placing limitations on wholesale gas and coal prices. The Australian Petroleum Production and Exploration Association (APPEA), which includes Exxon Mobil Corp and Shell Plc, has lobbied for an urgent meeting to discuss concerns that the proposals would give the government “unprecedented powers” to intervene in the gas market, including the “ongoing power to regulate prices permanently”.
The Prime Minister told ABC Radio: “We’ll meet with them when we meet with them this week”, adding that “Over the weekend, I chatted with some of the companies involved.”
The federal, state, and territory governments agreed last week to cap the wholesale price of gas and coal at 12 Australian dollars ($8.12) per gigajoule and 125 Australian dollars ($84.57) a tonne, respectively. Although prices are still anticipated to climb by nearly 50%, according to estimates from the Treasury, households in Australia will pay 230 Australian dollars ($155.62) less in 2019 than they would in the absence of government intervention.
Albanese has also suggested that after the price restriction expires, gas producers be compelled to set their sales contracts based on the cost of production plus an agreed-upon profit margin. On Thursday, Parliament will meet a special session to vote on the ideas. Albanese, whose Labor Party relies on support from smaller parties in the Senate, has voiced optimism that the legislation will be supported by the opposition Liberal-National alliance.
Price caps, according to Liberal Party leader Peter Dutton, have not succeeded elsewhere, and the government should boost gas supplies. The Green Party, which has 12 senators, has warned it will vote against the measures if they contain compensation for “greedy” coal and gas corporations.
