Australia’s Albanian to meet gas lobby over price cap concerns

The Australian leader aims to pass legislation this week imposing caps on wholesale gas and coal prices.

Australian Prime Minister Anthony Albanese has said he will meet representatives of the gas sector amid industry opposition to government proposals for a one-year cap on gas and coal prices.

Albanese, who leads the center-left Labor Party, hopes to pass a law this week imposing caps on wholesale gas and coal prices to check the escalation of energy prices amid the war in Ukraine.

The Australian Petroleum Exploration and Production Association (APPEA), which includes Exxon Mobil Corp and Shell Plc, has opposed the caps and called for an urgent meeting to discuss concerns that the proposals would give the government “unprecedented powers”. to intervene in the gas market, including the “permanent power to regulate prices permanently.”

“We will meet with them when we meet with them this week,” Albanese told ABC Radio. “I spoke to some of the companies involved… over the weekend.”

Under proposals agreed by the federal, state and territory governments last week, the wholesale price of gas and coal would be capped at A$12 ($8.12) a gigajoule and A$125 ($84.57) a gigajoule. ton, respectively.

The Treasury has estimated that the plans will result in Australian households paying A$230 ($155.62) less next year compared to a no-government scenario, though prices are still expected to rise nearly 50 percent.

Albanese also suggested requiring gas producers to set their sales contracts based on cost of production plus an agreed markup after the price cap ends.

Parliament is scheduled to hold a special session on Thursday to vote on the proposals. Albanese, whose Labor Party relies on support from smaller parties in the Senate, has expressed confidence that the opposition Liberal-National coalition will support the legislation.

Liberal Party leader Peter Dutton said price caps have not worked elsewhere and called on the government to increase gas supplies.

The Green Party, which holds 12 seats in the 76-member Senate, has said it will oppose the plans if they include compensation for “greedy” coal and gas companies.