Australia's economic future is under threat due to expensive energy prices and gas shortages. According to a report by MacroBusiness, the East Coast gas price has reached $24, which is double the government's price cap. This high price puts Australia at a disadvantage compared to the United States, where gas prices are one-fifth of what Australians pay. The report highlights that Victoria is facing imminent gas shortages and may have to make a difficult choice between supplying gas to households or manufacturers. The potential closure of operations by companies like Brickworks due to gas shortages and high prices further exacerbates the issue [57b7eb58].
Australia's East Coast, which exports 80% of its gas, is currently experiencing shortages and high prices. Unlike other gas exporting jurisdictions, Australia does not reserve its gas for domestic use. This has led to a situation where Australians are paying high prices for gas while the majority of it is being exported. The report argues that the federal government should implement a domestic reservation system and regulate domestic gas prices at $6 per gigajoule. This would ensure that Australians receive a fair financial return from gas exports and pay a fair, regulated cost-plus price for domestic gas [57b7eb58].
The expensive energy prices and gas shortages in Australia are contributing to a cost-of-living crisis and CPI inflation. The combined hyperinflation of gas and electricity prices is putting a strain on households and businesses. To address this issue, the report recommends implementing a domestic reservation system and regulating domestic gas prices to provide relief to Australians [57b7eb58].
The report by MacroBusiness highlights the urgent need for Australia to address the issue of expensive energy prices and gas shortages. The implementation of a domestic reservation system and regulation of domestic gas prices would not only ensure a fair financial return from gas exports but also provide relief to households and businesses. These measures are crucial in securing Australia's economic future and addressing the cost-of-living crisis [57b7eb58].
The Australian Energy Market Operator has warned that Lochard Energy's Iona facility in northeast Victoria could run out of gas before the end of winter. The drawdown from the facility needs to be halved to avoid it running dry. Orica, a major supplier of explosives to the mining industry, may be forced to import ammonia for its manufacturing plant in Newcastle if affordable gas is not available. The Australian gas price is significantly more expensive than in other jurisdictions, making it difficult to justify manufacturing in Australia. This situation highlights the hollowing out of the gas cartel in Australia, which could have implications for the country's ability to manufacture explosives [3ce45603].