The federal energy minister has taken aim at the gas industry, saying it is only complaining about the new price cap because its members wanted to preserve “the big profits they were making while the war in Ukraine is going on”.
With the oil and gas industry now demanding an urgent meeting with the government, Chris Bowen said on Sunday the intervention was “a decisive package for difficult times” and accused the federal opposition of copying “the gas companies’ talking points”.
The opposition is fiercely critical of the package, and the Greens have vowed to use their influence as a crucial voting bloc in the Senate to push the government to make changes, including subsidies for consumers to switch from gas appliances to electric.
After a national cabinet meeting late last week, governments agreed to cap gas prices temporarily at $12 a gigajoule and coal prices at $125 per tonne, with federal parliament due to be recalled on Thursday.
The Australian Petroleum Production & Exploration Association (Appea) described it as a “radical intervention” that would “smash investment confidence in Australia”.
The industry body’s chief executive, Samantha McCulloch, argued the package would actually “force prices higher for households and businesses because it will kill investment confidence and reduce future supply”.
McCulloch said the government had “not given the heads of agreement with east coast exporters and the Australian gas industry code of conduct – both announced only 71 days ago – a chance to work”.
“Appea seeks an urgent meeting with Prime Minister Albanese so we can address the serious concerns we have over his 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 a temporary price cap – but now we learn those caps can be extended and its mandatory code of conduct will have the ongoing power to regulate prices permanently.“
But Bowen told Sky News he did not find Appea’s complaints “convincing in the slightest”.
He said Australians should pay a fair price for gas extracted in Australia, rather than being hit with “a wartime price leading to very high profits for a few companies and endangering industries right around the country”.
“Appea’s job is to represent the companies who are members of them who were quite happy with the big profits they were making while the war in Ukraine is going on,” Bowen said.
“I understand that, respect that. That’s their job to defend those profits. It’s not our job. It’s our job to act in the national interest.”
For eastern states, gas prices in the September quarter averaged $26 per gigajoule, a 142% increase from a year earlier and only slightly below the $28.40 per gigajoule price in the April-June period.
Bowen said 96% of gas sold last year for under $12, with an average price of $9.20 a gigajoule. “For anybody to argue that they need to be able to make more than $12 and double that is just ridiculous,” he said.
Bowen said he was “surprised that Peter Dutton’s bought that argument” but the opposition leader had “no original thoughts, no original ideas, no plan of action at all”.
“I mean, Peter Dutton’s talking points are basically the gas companies’ talking points,” Bowen said.
The Greens said on Sunday they would “oppose any compensation to coal corporations, and coal and gas corporations should instead fund higher levels of price bill relief through a windfall tax”.
The leader of the Greens, Adam Bandt, said his party also wanted “more money to go to households, renters and businesses, including to get off gas, switch to electric appliances and install batteries”.
It is unclear whether the Greens would be prepared to scuttle the entire package if their demands are not met, but they will formalise their position at a meeting on Tuesday.
Dutton’s office was contacted for further comment, but the opposition leader said on Friday it was important to boost gas supply.
Dutton said price caps had not worked elsewhere “and what the government needs to do is to drive more supply – more gas into the marketplace – instead of reducing supply at a time when you’ve got increased demand”.
Ted O’Brien, the Coalition’s energy spokesperson, ramped up the criticism on Sunday, saying the energy price plan was a “cobbling together” of thought bubbles and “we’ll be here again next year with higher prices”.
“They are calling for parliament to sign off on something and they have no idea how it’s going to work,” O’Brien told Sky News.
Bowen said gas exploitation was a matter mainly for state regulation but there was not “a magic pile of gas on standby just to put into the system whenever they think is necessary”.
