Election 2025: Dutton’s gas blast to cut energy bills for households

Peter Dutton says the Coalition’s gas policy will reduce wholesale prices by 23 per cent, slash industrial retail gas bills by 15 per cent and cut 7 per cent from household costs.

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Peter Dutton says the Coalition’s gas policy forcing LNG exporters to increase onshore supply and ­decoupling local prices from ­overseas markets will reduce wholesale prices by 23 per cent, slash industrial retail gas bills by 15 per cent and cut 7 per cent from household costs.

Frontier Economics modelling released by the Opposition Leader on Tuesday night claimed his ­national gas plan – headlined by an east-coast reservation scheme – would immediately apply downward pressure on domestic prices and “progressively lower” gas and electricity bills.

Amid industry concerns about volatile international gas markets and delays in unlocking domestic supply, the modelling indicates wholesale electricity prices will be 8 per cent lower and household electricity bills will reduce by 3 per cent.

The Australian can reveal that under the gas-reservation plan, east coast producers will be slugged with a $400m levy in the first year, which would only be ­rebated if they supplied up to 100 petajoules of gas into the domestic market at a price below $10.

The levy will cover the gap ­between a $10 domestic price and what is known as an LNG net back price, which is the price at which a Queensland LNG exporter would switch from turning gas into LNG and exporting to Japan and Korea or alternatively selling surplus gas into the domestic market.

The modelling underpinning the Coalition’s plan to drive down new wholesale gas prices from more than $14 per gigajoule to less than $10 intensifies the contest ­between Mr Dutton and Anthony Albanese over whose policies will lower power costs and provide ­energy security for millions of households and businesses.

The modelling, which does not specify timelines for when prices will reduce, assumes a Dutton ­government’s multi-billion-dollar backing of gas will provide incentives for investment and new supply, and that a gas security charge will “encourage gas producers to sell at competitive prices locally”.

As the Coalition prepares to ­release a flurry of policy ­announcements before the May 3 election campaign is disrupted by Easter and school holidays, Mr Dutton framed his gas-fired plan as a critical plank in supporting ­industry amid rising global uncertainty fuelled by Donald Trump’s tariffs war.

The release of the modelling ramps up the contest between Mr Dutton and the Prime Minister, who last week dumped Labor’s Powering Australia modelling and refused to guarantee power prices would fall once the government’s energy relief rebates expired at the end of this year.

After Labor walked away from its pledges to reduce power bills by $275 from mid-2025 and a further $103 by the end of the decade, Mr Dutton said the government’s ­“energy failure” was “hitting Australians hard”.

“Household gas bills have surged by 34 per cent and electricity by 32 per cent – costing ­families up to $1300 more than they were promised,” the Opposition Leader said.

“Our policy will be a gamechanger because we can then see the cost and therefore price of electricity, construction, food prices and many other goods start to come down. The Coalition’s ­national gas plan will secure ­supply and drive down prices to make sure Australian gas is available for Australian homes and businesses first.”

The modelling showed that, at a current international LNG price of $16 a gigajoule, where there are $2 a gigajoule costs to export gas, the net back price is $14 a gigajoule. Gas producers, including consortiums led by Santos, Shell and ­Origin, would then pay the difference between the net back price and the $10 domestic gas price.

“If the (long run) marginal costs of producing gas domestically is, say, $10 per gigajoule, then a gas security charge of $4.01 per gigajoule would mean that the gas producer would be better off selling gas domestically for $10 per gigajoule than exporting the gas and receiving $9.99 per gigajoule ($14 minus $4.01), all other things being equal,” the modelling said.

“Producers would face the gas security charge on exports (not under foundation contracts) up to the quantity of gas reserved for the domestic market but be rebated that gas security charge if the producer meets their domestic gas supply obligation.

“This means that the scheme will have an immediate impact on new wholesale gas sales and, progressively, more sales will occur at the competitive [domestic] market price.”

The Coalition gas policy – developed by resources spokeswoman Susan McDonald and climate change and energy spokesman Ted O’Brien – provides households and businesses with a short-to-medium-term energy security plan until nuclear power comes online from 2036.

Labor’s energy policy, geared around achieving 43 per cent emissions reduction by 2030 and net-zero emissions by 2050, is dominated by renewables and batteries, with limited support from gas under the government’s Future Gas Strategy. The ALP, teals and Greens have launched scare campaigns attacking Mr Dutton’s energy plan, warning voters that nuclear power will cost too much and take too long to bring online.

As the US shores up its gas reserves to lower domestic prices and support heavy industry and manufacturing, Mr Dutton said: “We sit on some of the most abundant gas reserves in the world – it’s time we unlocked those resources to lower prices, protect jobs and power Australia. In times of global uncertainty, Australians need the confidence that comes from secure, affordable energy – and that starts with Australian gas working for Australians.

“Gas is critical to our nation’s energy future. By making the gas companies put more of our Aussie gas into our market instead of exporting it, we will get the price of gas down by 15 per cent.”

The Coalition plan includes a $300m strategic basin plan accelerating investment in new gas supply, auditing development-ready gas projects with a focus on laggard southern states, fast-tracking Western Australia’s North West Shelf project within 30 days and imposing “use it or lose it” rules for offshore gas fields that remain locked up. To drive energy prices down, Mr Dutton has pledged to introduce the east-coast reservation scheme, strengthen gas triggers and add gas to the capacity-investment scheme to accelerate gas-fired power plants. A Dutton government would also establish a $1bn critical gas infrastructure fund to help upgrade and build pipelines.

Frontier Economics co-founder Danny Price, whose work underpinned Mr Dutton’s nuclear policy promising to build up to seven nuclear power plants across Australia, said the Coalition gas plan would “incentivise supply to the domestic market of between $9-10/GJ for new sales of gas”.