ACCC inquiry into Eastern and Southern Australian wholesale gas prices

by Energy Action | May 15, 2015
On 13 April 2015, the Australian Government directed the Australian Competition and Consumer Commission to commence a twelve-month public inquiry into the competitiveness of wholesale gas prices in Eastern and Southern Australia.

Professor Ian Harper’s recent Review of Competition Policy recommended a detailed review of competition in Australian gas markets. Additionally, a recent Productivity Commission research report found a thorough investigation of market power issues was required before further policy intervention in upstream gas markets.

The Government has directed the Australian Competition and Consumer Commission (ACCC) to take into consideration in the inquiry a number of matters including, but not limited to:

  • the availability and competitiveness of offers to supply gas and the competitiveness and transparency of gas prices;
  • the competitiveness of, and access to, and any restriction on market structures for gas production, gas processing and gas transportation;
  • the significance of barriers to entry into the upstream production sector;
  • the existence of, or potential for, anti-competitive behaviour and the impact of such behaviour on purchasers of gas; and
  • transaction costs, information transparency including gas supply contractual terms and conditions, and other factors influencing the competitiveness of the markets.

Notably however the inquiry will not consider competition in gas retail markets.

By holding an inquiry the ACCC can use compulsory information-gathering powers to obtain the information required to assess whether insufficient competition is adversely impacting on prices.

The ACCC has said it will distribute an Issues Paper during May 2015 on matters relevant to the inquiry, and will be calling for public submissions. The ACCC will also be conducting public and private hearings.

This inquiry is due to report to the Australian Government by April 2016.

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