Gas prices fell significantly during the past year, driven in part by the COVID-19 pandemic. While lower gas prices are providing some relief to manufacturers and other gas users on Australia’s east coast, prices were still higher than export parity, the ACCC’s latest gas report reveals.
The report, released today, highlights that these lower prices may not last, and that the risk of a supply shortfall remains. While east coast gas supply is expected to meet demand during 2021, a shortfall of as much as 30 PJ may arise by 2024 in the southern states, while the broader east coast gas market faces the risk of a shortfall in 2026.
“The fall in gas prices is very welcome news for major gas users who, like many other Australian businesses, have faced enormous challenges in responding to the COVID-19 pandemic,” ACCC Chair Rod Sims said.
“It is concerning that the risk of a gas supply shortfall in Australia’s southern states continues, despite this having been a looming issue for some time.”
“There are new sources of supply and related infrastructure that could be brought online to avoid a potential shortfall. It is crucial that investment decisions are made now to ensure there’s enough supply, and to provide downward pressure on future price rises,” Mr Sims said.
The fall in gas prices has been in part driven by record low oil and LNG spot prices exacerbated by the COVID-19 pandemic.