MAJOR gas producers in Australia, including Woodside Energy and Beach Energy, have slammed the government's proposed domestic gas price caps, saying they will damage the investment environment at a time when new gas supply is urgently needed. The federal government unexpectedly announced last Friday that it would set a temporary price cap as a means of providing financial aid to the - country's gas users. The 12-month cap would be set at A$12 (US$7.7) per gigajoule on new wholesale gas sales by producers on the east coast subject to consultation. Alarm bells rang loud at the oil and gas industry association APPEA, which on Monday said the government was "dismantling the gas market" and was planning a far more extensive intervention to control the market on both the east and west coasts. Beach Energy chief executive Morne Engelbrecht said the so-called "reasonable price provision" announced by the government on 9 December would cause "irreparable damage to the investment environment desperately needed for gas exploration and development, and in turn energy security and future prices in Australia". "This unprecedented move goes well beyond the temporary price cap, which itself will damage the investment environment in Australia, leading to more gas shortages and higher power prices in the long term.
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