Australian Prime Minister Anthony Albanese has said he will meet with representatives of the gas sector amid industry opposition to government proposals for a one-year cap on gas and coal prices.
Albanese, who leads the centre-left Labor Party, hopes to pass legislation this week imposing caps on wholesale gas and coal prices in order to tame spiralling energy prices amid the war in Ukraine.
The Australian Petroleum Production and Exploration Association (APPEA), which includes Exxon Mobil Corp and Shell Plc, has opposed the caps and requested an urgent meeting to discuss concerns the proposals would grant the government “unprecedented powers” to intervene in the gas market, including the “ongoing power to regulate prices permanently”.
“We’ll meet with them when we meet with them this week,” Albanese told ABC Radio. “I spoke with some of the companies involved … over the weekend.”
Under proposals agreed to by the federal, state and territory governments last week, the wholesale price of gas and coal would be capped at 12 Australian dollars ($8.12) a gigajoule and 125 Australian dollars ($84.57) a tonne, respectively.
The Treasury has estimated that the plans will result in Australian households paying 230 Australian dollars ($155.62) less next year compared with a scenario in which the government does not intervene — although prices are still expected to rise nearly 50 percent.
Albanese has also suggested that gas producers be required to set their sales contracts based on the cost of production plus an agreed profit margin after the price cap ends.
Parliament is scheduled to hold a special session on Thursday to vote on the proposals. Albanese, whose Labor Party relies on support from smaller parties in the Senate, has expressed confidence the opposition Liberal-National coalition will support the legislation.
Liberal Party leader Peter Dutton has said price caps have not worked elsewhere and called on the government to increase the supply of gas.
The Green Party, which holds 12 seats in the 76-member Senate, has said it will oppose the plans if they include compensation for “greedy” coal and gas companies.
