The ACCC says the gas industry lacks transparency.

The competition regulator’s Gas Inquiry 2017–20 Interim Report – April 2018 confirms that while conditions in the east coast gas market have improved since September 2017, the market is still not functioning effectively.

Prices offered to large commercial and industrial gas users towards the end of 2017 were well below the peak of over $20/GJ in early 2017. After falling to a range of $8 to 12/GJ between June and November 2017, price offers made between November and January 2018 narrowed to $8 to 10/GJ for gas commodity.

Despite improved prices, the gas market continues to suffer from a lack of transparency across the supply chain, the authority says.

To promote improved gas price transparency, the ACCC will begin publishing LNG netback prices on its website to provide gas users with better information about export parity prices.

The east coast gas market is exposed to international LNG prices, which influence domestic prices.

“At the moment gas users haven’t got enough information to assess how international prices are driving domestic gas prices,” ACCC Chairman Rod Sims said.

“We believe that publishing LNG netback prices is an important step towards improving gas price transparency to improve the competitive bargaining process.”

Other measures aimed at increasing transparency are also beginning to come into effect.

The ACCC compiled its report based on information from pipeline operators under new disclosure obligations in Part 23 of the National Gas Rules.

“While it is early days, we have found that published standing prices for pipeline services are higher for many pipelines than the prices paid under existing contracts,” Mr Sims said.

“They are also higher than what we have seen in recent contracts. We do not think this was intended when these measures were put in place.”

“The ACCC will continue to review the information published under the new disclosure obligations. In the meantime we believe shippers should be able to negotiate prices below the standing prices recently published.”

“We will continue in our work to improve transparency across the gas supply chain,” Mr Sims said.

The ACCC’s next interim report is scheduled to be provided to the Treasurer in late July.