Hot take alert: The price of gas is a very sexy topic. This is because without paying for gas, some of us won’t be able to take steamy showers. And who wants to get into bed with their anime body pillow if they’re all grimy and dirty at night?
So, without any further ado, here’s what you need to know about Australia’s gas prices.
Why Were Australia’s Gas Prices Capped?
In 2022, 25% of Australia’s coal-fired power stations were offline. This was thanks to a series of planned and unplanned repairs and maintenance procedures. Because Australia needs a better renewable game, this gap was filled by gas.
Now, this event might not have been an issue if Australia’s gas prices were responsible. But unfortunately, they sucked. Because a ton of countries were hungry for non-Russian gas, Australian gas producers were incentivized to sell their stash overseas at buckwild premiums. This created a situation where our local gas prices were also devastatingly high.
Enter: The Australian Government. These folks stepped up to the plate and decided that 2022’s Aussie gas prices were hurting too many individuals. So on December 23, they capped them for an entire year.
How Much Are Australian Gas Prices Capped By?
As of right now, gas prices are capped at $12 a gigajoule. To put this number in context, from July to September of 2022, the average gas price in Victoria was $24.40 a gigajoule. In Adelaide, it was $27.29 a gigajoule.
Moreover, the Australian Competition and Consumer Commission (ACCC) has the power to fine gas companies that don’t comply with these rules. Gas companies will either be fined $50 million or three times the amount they’d received from an unfair deal.
If the ACCC can’t determine how much a gas company made while overcharging a customer, it’ll fine them 30% of its Australian turnover for the next 12 months. Yup, the ACCC isn’t messing about.
It’s worth noting that these fines were announced after some small manufacturers claimed that gas companies weren’t playing by the rules.
Reactions to the Australian Gas Price Caps
Unsurprisingly, gas companies weren’t stoked about these regulations. Some have claimed that these caps will reduce the amount of money people invest in new gas projects.
However, our Industry Minister, Ed Husic, has dismissed these claims.
“There might be some that are addicted to the Putin profits that they were making, and they are going through withdrawal symptoms,” said Husic. “But they should be under no illusion about the determination of the government to get the balance right in terms of pricing. They were making big profits. They were still doing very well, thank you very much. They can still do very well, thank you very much.”
“As a government, we have got to get the balance right for not just the gas companies, making the big profits, but for other businesses that are dependent on gas as well.”