Australian Competition and Consumer Commission (ACCC) chair Rod Sims was speaking at the 2020 National Conference of the Energy Users Association of Australia when he said current pandemic conditions provide “an opportunity to reset affordability and competition in energy markets”.

He expressed concern around “the widening divergence between domestic gas price offers and the LNG netback price, or the price LNG producers receive when they sell their gas overseas”.

He was asking LNG producers to explain why they are selling gas domestically at “substantially” higher prices than they can get from buyers in international markets.

According to Mr Sims, this is occurring in both “spot” or current prices and forward, longer-term pricing models.

A sudden drop in international prices should be reflected in the prices offered in the domestic market if the market is well functioning, the chair stated.

Since the Australian market is linked to world gas markets, “when there are lower gas prices around the world, it is vital that Australian gas users get the benefit”, Mr Sims said.

The high price point is not just an issue for the gas sector, with the consumer watchdog noting a recent 50 per cent drop in wholesale electricity prices as representing “an opportunity to reduce electricity prices and restore our international competitiveness”, Mr Sims added.

“We expect those reductions in wholesale market costs to be long-lasting and so to be seen in lower customer bills, and the ACCC will take action where retailers do not reduce their prices,” he said.

He considered Australia as at “a tipping point in terms of achieving competitively priced gas and electricity, and we need to ensure that this opportunity is not lost”.