The head of oil giant Shell's Australian multibillion-dollar operations has laid the blame for the east coast gas squeeze squarely with the Victorian government, declaring that rising prices caused by the state's ban on onshore gas will take a direct toll on jobs.

Deflecting criticism that Queensland's LNG industry is to blame for the difficulties being experienced in the east coast gas market, Shell Australia chairman Andrew Smith pointed instead to "short-sighted political decisions" such as Victoria's, which is keeping much-needed gas in the ground.