Aussie gas costs more here than in Japan

AUSTRALIAN consumers paid up to 65% more in July than their Japanese counterparts for gas produced in Australia, the Institute for Energy Economics and Financial Analysis says.

The IEEFA says its analysis demonstrates gas produced in Australia was sold in Adelaide at an average of $13.90 a gigajoule, compared to $8.42 in Japan. Brisbane residents paid $10.12 and those in Sydney were slugged $9.62.

On average, Australian consumers faced 33% higher prices in July than those in Japan.

In June, the situation was even more extreme, with Australians paying 62% more than Japanese consumers.

"Bearing in mind the high costs of transport and liquefaction, it makes no sense that Australian gas should be cheaper in Japan - one of the highest cost markets in the world," IEEFA analyst Bruce Robertson said.

According to the institute's estimates, gas is currently shipped at a cost of 97 cents a gigajoule, with liquefaction costs of about $1.95.

"A broken regulatory system is allowing gas producers to maintain a cartel-like grip on pricing, which they are exploiting to the full, with a particularly acute impact on Australian manufacturers," Mr Robertson said.

The East Coast Gas Market - which covers New South Wales, the ACT, Victoria, South Australia and Queensland - is largely served by four producers: Santos, Origin Energy, Shell and BHP/Exxon.

The IEEFA is critical of the market's operation, arguing it lacks transparency.

"While producers continue to press for the opening up of unnecessary onshore gas fields, the companies involved refuse to disclose current available reserves or production capacity from existing gas fields," Mr Robertson said. "At a time of a global supply glut, one would have thought the Australian consumer would have a plethora of choices for cheap supply.

"But what is effectively happening is that gas producers are ensuring domestic gas supply in Australia is rationed and prices kept well above comparable gas prices in offshore markets.

"A first step to counter this would be clear disclosure."


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