Media release: ACCC report highlights urgent need for enduring gas market reforms

The ACCC’s latest Gas Inquiry report has found the complex patchwork of east coast gas market regulations has exacerbated the risk of domestic shortfalls and deterred new investment, underscoring the important opportunity for the Gas Market Review to deliver enduring reforms that support new gas supply.

Australian Energy Producers Chief Executive Samantha McCulloch said the ACCC has reaffirmed what gas producers have long argued, that the existing framework needs to be overhauled to address barriers to new gas supply and support a return to a competitive and functioning gas market that delivers for producers and users.

“The ACCC has confirmed the east coast gas market is not working for anyone, and eastern Australia faces increased risk of shortfalls and higher energy prices if these concerns are not addressed,” Ms McCulloch said.

The ACCC’s review of the Gas Market Code, the Australian Domestic Gas Security Mechanism (ADGSM) and Heads of Agreement (HoAs) with Queensland LNG exporters found that “the instruments have not addressed underlying constraints” in the gas market. It found that the 2023 reforms to the ADGSM “appear to have had the unintended consequence of exacerbating the risk of domestic supply shortfalls.”

Ms McCulloch said the Gas Market Review presented an opportunity to end the cycle of reactive market interventions and perpetual shortfall forecasts, and deliver enduring reforms that encourage investment in new supply and restore confidence in the market.

“The priority must be addressing approval delays to unlock new gas supply close to where it is needed, and to work with gas producers and users on the design of a prospective gas reservation framework linked to new supply that provides longer term supply certainty.”

Australian Energy Producers’ submission to the Gas Market Review proposed a prospective reservation policy linked to new supply as part of a suite of actions to deliver more gas supply to the domestic market and provide certainty to gas producers and users. This includes reforms to streamline approvals, remove reporting duplication, and facilitate expanded gas pipeline and storage capacity.

The ACCC forecasts a surplus of 2–24 PJ in Q1 2026, but shortfalls are still forecast from 2028. It also found that while long-term supply deals for 2026–27 have increased they remain below 2022 levels.

“Industry stands ready to work with governments and gas users to ensure we have a well-supplied gas market to provide Australians with reliable and affordable energy,” Ms McCulloch said.