‘Glut of greed’: industry minister condemns Australian gas industry’s pursuit of higher prices

Ed Husic says industry is ‘completely tone deaf’ to appeals on prices and he’s ‘considering a wide range of interventions’

The federal industry minister, Ed Husic, has condemned the “tone deaf” gas sector for failing to do the right thing by domestic consumers, despite warnings from government, saying there had been a “glut of greed” in the corporate pursuit of higher prices.

The comments have sparked a fresh stoush with the gas sector, with the peak body accusing Husic of misrepresenting the nature of the domestic market and for “name calling and sledging” the industry.

Flagging a suite of reforms to address soaring gas and electricity prices, Husic confirmed a mandatory code of conduct was in the works to try to ensure more affordable domestic gas supply.

The move comes after the federal budget forecast electricity price hikes of 56% over the next two years and gas price rises of 44%, with some of this already showing up in power bills.

Husic said that gas producers were expecting prices on the domestic market that they would not “reasonably expect” internationally, and accused them of not taking the issue seriously in contract bargaining.

“They are not picking up the signals and they’re completely tone deaf to the view that is being expressed publicly,” Husic told ABC radio on Thursday.

“That’s why we’ve got to a point where we are now forced to consider a wide range of interventions to get a better deal, because these companies are just not doing the right thing.”

Husic said the Australian Competition and Consumer Commission was looking at the framework for a new mandatory code of conduct for the sector, which would force gas companies to negotiate better prices for domestic users, saying contract prices had not come down after the recent signing of a heads of agreement.

He said that the sector was taking a “take it or leave it” approach in domestic negotiations, and then selling gas offshore, saying calls for more supply would not address the issue.

“This is not a shortage of supply problem; this is a glut of greed problem that has to be basically short circuited and common sense prevail.”

But the Australian Petroleum Production & Exploration Association chief executive, Samantha McCulloch, hit back at Husic saying it was “irresponsible” for the minister to “repeatedly demonise and misrepresent a leading industry so critical to the national economy”.

“It is easy to misrepresent how the gas market works, but the facts are that average domestic prices are well below international prices,” she said.

“The industry has secured domestic supply and has worked tirelessly to get the gas to where it needs to go and ease pressures caused by a lack of policy support, bans and regulatory uncertainty for years in some jurisdictions; global energy market turmoil; and coal-generation outages and renewables failing to generate electricity during winter.”

Along with changes to the code of conduct, it is widely anticipated that the government will look to include some sort of price trigger under the Australian Domestic Gas Security Mechanism.

The resources minister, Madeleine King, said on Thursday that the gas sector was aware it was “on the nose”, and the government was working to avoid any ad hoc response.

As the government mulls its options for reform, the opposition leader, Peter Dutton, accused the prime minister, Anthony Albanese, of taking the country on a “dangerous path” by switching to renewables too quickly.

He also accused the government of having “thought bubbles” about how to address the energy crisis, and suggested the possible interventions could have unintended consequences such as withdrawal of supply or a hit to national income.

“If they’re talking about price caps or if they’re talking about super profits taxes, or they’re talking about limiting exports, they need to explain the logic of all of that to the Australian public, because at the moment, all we’re getting from this government is a day by day thought on how it is that they’re going to fix a problem.”

As Dutton continues to campaign against the shift to renewable energy, the former prime minister Malcolm Turnbull hit out at his party for having “lost its way” on climate policy, while taking aim at Dutton for claiming nuclear was a necessary part of the energy mix.

He also said the loss of the so-called teal seats at the May election showed the party had failed to recognise the importance of climate change, and many Liberal voters had walked away as a result.

“It is difficult to see how the Liberal Party can ever win a majority in the House of Representatives without recapturing those seats, and they’ve lost them because of their own failure to respond proactively and effectively on climate.”


Sarah Martin Chief political correspondent

The GuardianTramp

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