The ACCC is sharpening its focus on gas retailers.

The Australian Competition and Consumer Commission (ACCC) is running a review motivated by industrial gas users' grievances over pricing and supply terms.

Commissioner Anna Brakey says the regulator has found that despite improvements last year, “some retailers’ standard selling practices do appear to fall short of what we would expect in a workably competitive market”.

This closer examination targets major retailers such as AGL, Origin Energy, and EnergyAustralia, which are pivotal for smaller industrial customers unable to negotiate directly with producers for more favourable rates. 

Interestingly, these retailers are exempt from the federal government's $12-a-gigajoule price cap implemented last year.

Ms Brakey says declining gas prices could be coming, due to a reduction in both local and international spot rates. 

Despite contract prices for 2024 deliveries averaging around $18/GJ, a slight uptick from last year, there has been a gentle ease in spot prices after their previous fluctuations. 

“If this continues, we’d expect to see more competitive pricing for domestic gas users over time,” she noted.

However, rising operational costs and a delicate supply-demand equilibrium maintain pressure on prices. 

Adding to the complexity are factors such as the post-pandemic surge in exploration and development expenses, notably for offshore ventures, and the cost of transporting gas from Queensland to southern buyers, which remains high due to strong oil-linked LNG prices in North Asia.

But amid the pricing and supply challenges, Australia positions itself more securely to meet its winter gas demands than previously anticipated. 

The ACCC's latest forecasts project a 6PJ surplus in the September quarter of 2024, an improvement over the 5PJ deficit expected in December 2023. 

This optimistic revision stems from both increased supply forecasts and lower-than-expected domestic demand, though offset slightly by a rise in export demand.

Still, the ACCC remains cautious, citing “material uncertainties” such as weather variability and supply fluctuations that could sway gas availability. 

Southern states are bracing for potential shortfalls, necessitating withdrawals from storage or additional supplies from Queensland and the Northern Territory.