Australia’s Gas Price Crisis: Will Labor’s Bold Plan Actually Save You Money?

While politicians promise energy security, Australia’s east coast gas market has turned into a perfect storm of skyrocketing prices and shrinking supply.

The numbers don’t lie. Pre-export gas prices hovered around A$3.33/GJ. Now? A painful A$9.67/GJ average, with some periods hitting a wallet-crushing A$12/GJ. Thanks, unrestricted LNG exports.

Supply’s in trouble too. National petroleum production just had its sharpest quarterly decline since 2011. The ACCC is sounding alarms about a 22 PJ reduction in east-coast supply forecasts, with southern states facing a whopping 40 PJ shortfall in one quarter alone. The ACCC has urged the Australian Government to secure uncommitted gas from LNG producers for domestic use. Not great.

Australian gas supply is in freefall while regulators panic about massive shortfalls across southern states.

Labor’s response? Price caps and a Mandatory Gas Code. Sounds impressive on paper. The reality? Over 90% of gas sales remain unaffected by these caps.

Meanwhile, producer contracts for 2025 still average A$13.58/GJ, while retailers are charging around A$14.51/GJ. So much for government intervention.

Demand patterns tell an interesting story. Eastern Australia’s gas consumption has plummeted 29% over the past decade. Gas-fired electricity generation has seen an even steeper 57% drop since 2012-13. Residential usage took a nosedive – down 28% year-on-year in Q2 2025 alone. Australians aren’t using less gas because they want to. They’re using less because they can’t afford it.

Industrial users are feeling the burn too. Victoria’s manufacturing sector has slashed gas consumption by 33% since 2012-13. Some businesses are switching fuels. Others are simply shutting down.

The electricity sector adds another layer of chaos. Gas-fired generation doubled during crisis periods in 2022, pushing prices even higher when consumers could least afford it.

Will Labor’s plan save you money? The evidence suggests otherwise. Their policies have added market risk without meaningfully lowering prices. Contract volumes remain below pre-crisis levels despite some mid-2024 increases in activity.

Bottom line: Australia’s gas crisis isn’t going away anytime soon. And political promises? Worth about as much as the hot air they’re delivered with.