Markets improving but prices still too high: ACCC

ACCC Chairman Rod Sims.

ACCC Chairman Rod Sims.

The Australian Competition and Consumer Commission (ACCC) has released its second interim report of its inquiry into Australia’s gas supply.

The Gas Inquiry 2017-20 Interim Report – December 2017 picks up where the ACCC’s last report on the East Coast Gas Market left off, which found that a substantial shortfall was likely in 2018.

“Despite increased supply providing important short-term improvements in conditions, the market is still not operating as well as it could,” said ACCC Chairman Rod Sims.

“Prices remain higher than they would be in a well-functioning and competitive market.”

Since September, the report found that LNG producers have contracted 42 PJ of gas under long-term gas supply agreements to domestic buyers for supply in 2018, reducing exports to make this happen.

Prices offered to large commercial and industrial (C&I) users have come down from a peak of $16/GJ in early 2017 to within an $8-12/GJ range since July 2017.

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