When you think of impending disasters, the price of gas might not be the first one that pops into your noggin. After all, it seems less pressing than $5,000 blueberries or a lost snake that might make your bathtub their living room. However, according to the Australian Competition & Consumer Commission (ACCC), 2023’s gas prices might become more cooked than they already are.
As the ACCC’s latest Gas inquiry report stated, “The outlook for 2023 is very concerning and is likely to place further upward pressure on prices, which could result in some C&I [commercial and industrial] users no longer being able to operate. It could also lead to demand having to be curtailed.”
But why is this happening? And what can be done about this issue? Whelp, let’s answer these pressing questions before the next year hits us:
Where Does Australia Get Its Gas From?
Australia gets a ton of its gas from inside of its own borders. This can be demonstrated in some of the findings stated by the Climate Council. This organisation has stated, “28% of Australia’s land mass is currently subject to gas exploration or applications from gas companies. This includes a whopping 70% of the Northern Territory, 59% of South Australia, 14% of Western Australia and 13% of Queensland.”
Moreover, The Observatory of Economic Complexity detailed that in 2020, Australia exported $26.8 billion worth of petroleum gas, making us the 2nd biggest exporter of this resource on the planet. That very same year, we only imported $155 million worth of the very same gas.
So Why Will Australia’s Gas Prices Potentially Rise?
One of the major reasons behind the foreboding price hikes is that gas companies like money. They’d rather export gas at higher prices than they can sell in Australia. The ACCC is expecting that they’re going to withdraw a worrisome amount of gas from the domestic market and sell a majority of the ‘excess gas’ they produce overseas.
These companies typically act aghast when folks accuse them of acting like super villains.
But What Should the Australian Government Do?
The ACCC has recommended that the Labor government implement an Australian Domestic Gas Security Mechanism scheme. This program would allow the Minister for Resources, Madeleine King, to determine if they’ll be not enough gas in Australia next year. They can then put some export controls in place that would protect some Aussies from being completely decimated.