Ministers to decide if price cap fits for gas

Chris Bowen will face calls from state and territory counterparts to consider capping gas and coal prices, ­restricting energy exports, subsidising electricity bills and slapping a windfall profits tax on fossil fuel producers.

Energy Minister Chris Bowen. Picture: NCA NewsWire / Gary Ramage

Energy Minister Chris Bowen will face calls from state and territory counterparts to consider capping gas and coal prices, ­restricting energy exports, subsidising electricity bills and slapping a windfall profits tax on fossil fuel producers at a meeting aimed at curtailing price spikes.

South Australian Energy Minister Tom Koutsantonis said Friday’s meeting would be a “deep dive” into solving the crisis, with briefings from the Australian ­Energy Regulator, Australian ­Energy Market Operator and the Australian Energy Market Commission.

He said a comprehensive plan had to be led by the Albanese government and should include measures to force gas and coal producers to lower prices when selling to the domestic market.

“Australians find it unacceptable that fossil fuel companies are charging prices here that reflect the global price spike instead of local production costs,” Mr Koutsantonis said. “We are suffering because our commodity prices have been internationalised.

“The federal government has the regulatory triggers and needs to lead the process to differentiate domestic and export markets.”

Major gas users have sent the Albanese government a letter ­demanding a three-year $10-a-­gigajoule cap on domestic prices in a last-ditch attempt to head off the closure of manufacturing and heavy industry on the east coast.

Sources said gas contracts were struck this month by big users at $18-19GJ for a three-year deal.

NSW Energy Minister Matt Kean said thermal coal, which has nearly doubled in price since the war in Ukraine, needed to be part of any discussions of regulating domestic prices.

“Regulating gas alone is not a solution. It is essential that both coal and gas are addressed ­together to get the best outcomes for all states in the national ­energy market,” Mr Kean said.

He added the federal government should use the massive ­increase in tax receipts from coal and gas exporters to subsidise the electricity bills of households and businesses.

Queensland Energy Minister Mick de Brenni also signalled support for price regulation on coal and gas producers. “The ability to charge super prices in Australia, for essential services that are served by Australian-owned resources, is not acceptable to consumers,” he said.

ACT Energy Minister Shane Rattenbury said the Albanese government should slap a windfall profits tax on fossil fuel companies and redirect the money to household rebates.

“There are fossil fuel companies that are making super profits as a result of these high global commodity prices,” he said. “The federal government should introduce a super-profits tax.”

On Tuesday, Jim Chalmers flagged intervention in the energy sector after the budget forecast electricity prices to rise by 56 per cent in the next two years. The government is facing pressure over its pre-election promise to lower power bills by $275 by 2025.

The Energy Users Association of Australia, which counts BlueScope and Orica among its members, said a more than tripling in local prices had become unsustainable.

“We’re calling for a cap on the wholesale price of gas as an emergency measure. We’ve asked to put it in place for three years and it can be reviewed after that,” chief executive Andrew Richards said.