Australia is performing well in terms of gas prices, with the latest international survey of wholesale prices confirming that the country is amongst the lowest in the Asia region.
The International Gas Union’s Wholesale Gas Price Survey 2018 shows that the average wholesale gas price in Australia last year was approximately 40 per cent less than the average wholesale price for the Asia‑Pacific region and around one-third less than the average wholesale price in Asia.
Australia’s leading trade partners; Japan, South Korea and China, all paid average wholesale gas prices between $US7 and over $US8/MMBTU. Australia also enjoyed lower wholesale gas prices than its two regional LNG export competitors, Malaysia and Indonesia.
Globally, Australia’s average wholesale price ranked 29th in a survey of 54 nations.
“While prices for new contracts on the east coast are higher than they once were, the evidence shows that the widely repeated claim that Australian prices are higher than prices in the countries importing our liquefied natural gas (LNG) is wrong,” APPEA Chief Executive, Dr Malcolm Roberts, said.
“While the Australian gas market is tight and prices for new contracts are higher than they have been historically, it remains the case that across the economy, Australian gas consumers are not paying prices above those paid on average in Japan or other LNG importing nations.
“Quite the opposite is true. Australia’s wholesale gas prices remain in the ‘middle of the pack’, a position we have held for many years.”
The IGU’s report follows the release last week of the 2018 Gas Statement of Opportunities (GSOO) by the Australian Energy Market Operator (AEMO) which confirmed that the actions taken by the industry to bring more gas into the domestic market have removed any concerns about potential shortfalls out to 2030.
“Reports this year by the Australian Competition and Consumer Commission and independent consultants engaged by the Council of Australian Governments show that east coast gas prices have fallen from the elevated prices experienced in 2016 and early 2017. Prices will fluctuate according to many factors but the last twelve months have seen a general improvement,” Dr Roberts said.
“Removing unnecessary government restrictions on exploration and development is the most effective way to boost supply, enhance competition and put downward pressure on prices, ensuring Australia retains or improves its global position, while enjoying the substantial and ongoing benefits that flow to the nation from our LNG exports.”