To maintain energy price caps, minister Chris Bowen said Australians should pay a fair fee for gas extracted in Australia rather than 'wartime prices'
The federal energy minister took aim at the gas industry, saying they were only complaining about the new price cap because its members wanted to keep "the huge profits they made while the war in Ukraine was going on".
With the oil and gas industry now demanding an urgent meeting with the government, Chris Bowen said Sunday the intervention was a "defining package for difficult times" and accused the federal opposition of copying "gas company talking points".
The opposition has been highly critical of the package, and the Greens have vowed to use their influence as a key voting bloc in the Senate to push the government for changes, including subsidies for consumers to switch from gas to electric appliances. After a national cabinet meeting last weekend, the government agreed to cap gas prices temporarily at $12 per gigajoule and coal prices at $125 per tonne, with federal parliament due to withdraw on Thursday. The Australian Petroleum Production & Exploration Association (Appea) described it as a "radical intervention" that would "destroy investment confidence in Australia".
The industry body's chief executive, Samantha McCulloch, argued that the package would in fact "force higher prices for households and businesses as it would dampen investment confidence and reduce future supply".
McCulloch said the government had "did not give the heads of the agreements with east coast exporters and the Australian gas industry code of conduct - both announced just 71 days ago - a chance to work".
"Appea is seeking an urgent meeting with Prime Minister Albanese so we can address the serious concerns we have over the proposed dismantling of the gas market and Australia's reputation as an open, market-based economy," McCulloch said on Sunday.
“The government said it was introducing temporary price caps – but now we know they can be extended and its mandatory code of conduct will have the continuing power to set prices permanently.”
But Bowen told Sky News he did not find Appea's complaint "one bit convincing".
He said Australians should pay a fair price for gas extracted in Australia, rather than being hit with "wartime prices that yield exorbitant profits for some companies and harm industries across the country". "Appea's job is to represent companies that are members of those who are quite happy with the huge profits they are making while the war in Ukraine is going on," Bowen said.
“I understand that, respect that. It's their job to maintain that advantage. That's not our job. It is our duty to act in the national interest.”
For the eastern state, gas prices in the September quarter averaged $26 per gigajoule, a 142% increase from a year earlier and only slightly below $28.40 per gigajoule in the April-June period.
Bowen said 96% of gas sold last year was under $12, with an average price of $9.20 per gigajoule. "For anyone to think they should be able to make more than $12 and double that, that's ridiculous," he said.
Bowen said he was "shocked that Peter Dutton bought into the argument" but that the opposition leader "had no original thoughts, no original ideas, no plan of action at all".
"I mean, Peter Dutton's talking point is basically a gas company talking point," Bowen said.
The Greens said Sunday they would "oppose any compensation to coal companies, and coal and gas companies should instead fund a higher level of price bill relief through a windfall tax".
The leader of the Green Party, Adam Bandt, said his party also wanted "more money to go to households, tenants and businesses, including to cut fuel, switch to electrical appliances and install batteries".
It is unclear whether the Greens will be prepared to drop the entire package if their demands are not met, but they will formalize their position at Tuesday's meeting.
Dutton's office was contacted for further comment, but the opposition leader said Friday it was important to increase gas supplies.
Dutton said the price cap had not worked anywhere else "and what the government needs to do is push more supply – more fuel into the market – instead of reducing supply at a time when demand is increasing".
Ted O'Brien, the Coalition's energy spokesman, ratcheted up the criticism Sunday, saying that the energy price plan was a "bundle together" of thought bubbles and "we're going to be here again next year with even higher prices".
"They're asking parliament to sign off on something and they don't know how that's going to work," O'Brien told Sky News.
Bowen said gas exploitation was a problem primarily for state regulation but there was no "magic pile of gases ready just to be put into the system whenever they deem necessary". This article was written by EDUKASI CAMPUS.