Politics Now Power Play || Insiders On Background
Apr 11, 2025
Danny Price, a representative from Frontier Economics, joins David Speers to delve into the coalition's ambitious gas policy aimed at lowering energy prices. They explore how the proposed east coast gas reservation could impact consumer costs, dissecting modeling insights and the economic implications of pipeline capacities. The conversation touches on the interplay between gas markets and renewable energy investments, as well as the potential benefits for households, including notable decreases in gas and electricity bills.
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Gas Pricing
- Australian gas producers prioritize selling gas at the highest price, typically to international markets.
- This leaves Australian consumers paying high prices, even though production costs are lower.
Pricing Rationale
- The proposed $10/gigajoule price is based on the marginal cost of the highest-cost producer.
- This price still allows for a healthy return for producers, even with increased costs.
Regional Price Variation
- The $10/gigajoule price refers to gas at the Wallumbilla hub in Queensland.
- Transporting gas to other locations, like Victoria, adds to the cost, resulting in a higher price for consumers there.