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Fueling the Fire: Australia's Gas Market Paradox Threatens Consumers and Businesses

Note: The content of this article is based on the provided information and publicly available sources. It does not constitute financial or investment advice. Readers are encouraged to conduct further research and consult with relevant experts.

Australia's gas market presents a paradoxical situation where the nation stands as the largest exporter of gas globally, yet local businesses face higher costs and neglect in the face of soaring prices. Abundant natural gas reserves and a thriving export industry coexist with domestic shortages, impacting consumers and businesses across the country. In this article, we delve into the dynamics of the Australian gas market. We will focus on the disparity between East Coast and West Coast gas prices and the implications for Australian businesses. Through an exploration of industry reports and expert opinions, we aim to shed light on Australia's perplexing gas paradox and discuss potential solutions.

Key Takeaways

  • East Coast gas prices are influenced by LNG export prices, resulting in higher costs for Australian businesses [1][3].
  • Gas reserves are not being reserved adequately, leading to shortages and soaring prices on the East Coast [2].
  • The absence of gas reservation policies impacts Australian businesses despite the country's status as the largest gas exporter globally.

The East Coast Gas Cost Conundrum

The East Coast of Australia grapples with higher gas costs compared to the West Coast due to a lack of gas reservation policies [4]. Despite the nation's position as a major gas exporter, gas prices for Australian businesses remain elevated. This affects their competitiveness and viability.

Australia's Gas Market - A take of two coasts

The gas market in Australia is divided between the East Coast and the West Coast, with significant price discrepancies. On the East Coast, businesses struggle with higher gas costs, while the West Coast benefits from a reservation policy that maintains lower prices [4].

The Impact on Australian Businesses

The elevated gas costs on the East Coast pose a significant challenge for Australian businesses, particularly those in energy-intensive industries. Rising gas prices exert immense pressure on manufacturing, agriculture, and transportation sectors, jeopardising thousands of jobs [1].

Australia's Gas Export Boom

Australia's gas industry has experienced tremendous growth. This established the country as the leading global exporter of liquefied natural gas (LNG) [7][8]. However, the benefits of this export boom have not translated into adequate support for Australian businesses struggling with high gas prices domestically.

Australia's Position as a Global LNG Exporter

Australia's liquefied natural gas (LNG) exports have soared in recent years. This positioned the country as a dominant player in the global market. The growth in LNG exports has been driven by the development of export terminals and the establishment of trade relationships with various countries.

Neglecting Australian Businesses

While Australia enjoys the benefits of being a significant gas exporter, the domestic market has not received the same level of attention. The disparity between the thriving export industry and the neglected businesses on home soil raises concerns about the prioritisation of international markets over domestic needs.

The Paradox of Plenty

Australia's gas paradox stems from the coexistence of abundant natural gas reserves and soaring prices domestically. This paradox has implications for both consumers and businesses. It necessitates a deeper understanding of the factors contributing to this complex situation.

A Closer Look at Domestic Shortages

Despite being rich in natural gas reserves, Australia faces shortages in the domestic market. These shortages arise due to various factors such as limited exploration, regulatory uncertainties, and prioritisation of exports.

Impact on Consumers and Businesses

The gas paradox significantly impacts consumers and businesses across Australia. Soaring gas prices exert financial strain on households, while businesses face higher operational costs, reduced competitiveness, and potential closures. The ramifications of the gas paradox are far-reaching and require immediate attention.

The Urgent Need for Strategic Measures

Addressing the challenges posed by the Australian gas paradox necessitates the implementation of strategic measures to support domestic businesses and ensure energy security.

Revisiting Gas Reservation Policies

The introduction of gas reservation policies, similar to Western Australia's approach, could help mitigate the disparity in gas prices between the East Coast and the West Coast [4]. Exploring the potential for national gas reservation policies could be a crucial step in safeguarding Australian businesses.

Government Intervention and Price Controls

Government intervention, such as the implementation of temporary price controls, can offer relief to businesses grappling with high gas costs. These interventions can help stabilise prices and provide a supportive environment for domestic industries to thrive.

FAQs - Addressing Key Questions About Australia's Gas Market

To address common queries regarding the Australian gas market and the challenges faced by businesses, we've compiled a list of frequently asked questions along with concise answers.

FAQ 1: Why do East Coast gas prices remain higher for Australian businesses compared to the West Coast?

East Coast gas prices are influenced by the absence of gas reservation policies, which leads to limited supply and higher costs for businesses [4].

FAQ 2: How does Australia's position as the largest gas exporter impact domestic businesses?

Australia's gas export boom has not been adequately accompanied by measures to support domestic businesses, resulting in neglect and higher costs for Australian industries.

FAQ 3: What are the implications of the gas paradox for Australian consumers?

The gas paradox contributes to soaring gas prices domestically, placing financial strain on households and potentially impacting their living costs.

FAQ 4: Can strategic measures such as gas reservation policies help address the challenges?

Yes, implementing gas reservation policies, similar to Western Australia's model, can help balance gas prices and support Australian businesses [4].

FAQ 5: What role can government intervention play in mitigating the impact on businesses?

Government intervention through measures like temporary price controls and other supportive policies can provide relief to businesses grappling with high gas costs, offering a more stable environment for domestic industries.

FAQ 6: How can Australia ensure long-term energy security and support its businesses?

Ensuring long-term energy security requires a comprehensive approach, including investment in renewable energy sources, exploration of new gas reserves, and strategic planning to balance domestic and export demands.


The Australian gas market presents a paradoxical situation, with abundant natural gas reserves coexisting with domestic shortages and soaring prices. The disparity between East Coast and West Coast gas prices poses significant challenges for Australian businesses, impacting their competitiveness and viability. While Australia stands as the largest exporter of gas globally, the neglect of domestic industries raises concerns about the prioritisation of international markets over the needs of local businesses. To address these challenges, strategic measures such as gas reservation policies and government intervention are essential. By prioritising energy security and supporting businesses, Australia can navigate the complexities of the gas paradox and ensure a sustainable and thriving energy sector.

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