Matthew Guy makes grim energy warning amid concerns of a fresh gas crisis

A fresh gas crisis could force people to choose between buying food and heating their homes, one politician has warned.

Victorian Opposition Leader Matthew Guy has warned that a gas crisis could force people to choose between eating and heating their homes this winter.

Gas reserves at Victoria’s underground storage facility, Iona, have dropped to dangerously low levels, sparked by an influx of demand and a cap on prices.

The Australian Energy Market Operator has flagged it could intervene if gas supplies continue to be drained at the current rate.

“AEMO has determined that there is a possibility that market or operational responses may prove insufficient to alleviate the threat. AEMO is considering all other possible options prior to intervening,” it said on Monday evening.

The Iona storage facility in Port Campbell. Picture: Stuart McEvoy for The Australian

Victoria is the only state in which a price cap on gas prices remains.

It was triggered automatically in May in a bid to calm the market but has prompted NSW and Queensland to source more of its gas from the Iona plant.

As a result, the national energy regulator has warned that gas supplies could drop to a record low of 6 petajoules by early next month.

“This reduction in Iona supply capacity increases the risk of curtailment during peak demand days and during periods of high gas-generation demand,” AEMO said.

The latest crisis has renewed calls for the state to follow in Western Australia’s footsteps and introduce a gas reservation policy.

Matthew Guy says Victoria should introduce a gas reserve policy. Picture: NCA NewsWire / David Geraghty

WA’s scheme requires producers to reserve 15 per cent of the volume of LNG production for domestic use.

Mr Guy vowed to introduce a similar policy if elected in November but told reporters he would go further.

“Ours would be higher. We’ll do that to make sure that there are domestic reserves for Victorians,” he told reporters in Melbourne.

Mr Guy was concerned that due to the current government’s settings, Victorians were choosing between “heating or eating”.

“How on earth can that be the case in 2022?” he said.

However, state Energy Minister Lily D’Ambrosio put the blame squarely back on NSW and Queensland.

“The unprecedented demand for gas in NSW – who produce almost no gas of their own – has drawn down Victorian reserves, but AEMO advises that there continues to be sufficient gas to meet our needs,” she said.