Australian PM to meet gas producers over price cap concerns

SYDNEY: Australian Prime Minister (PM) Anthony Albanese said on Monday he would speak this week with the gas industry lobby, which is seeking an urgent meeting over the government’s plan to cap gas prices for one year.

The head of the Australian Petroleum Production and Exploration Association, whose members include global majors such as Exxon Mobil Corp (XOM.N) and Shell Plc (SHEL.L), has warned the government’s proposal would undermine investment, reduce new supply and drive up gas prices.

“We’ll meet with them when we meet with them this week,” Albanese told ABC Radio. “I spoke with some of the companies involved … over the weekend.”

The prime minister did not specify if he would meet the gas producers before the legislation is introduced in the parliament.

Australia has also proposed forcing east coast gas producers to fix their sales contracts based on the cost of production plus an agreed profit margin after the price cap expires, triggering criticism from the industry on Saturday.

Parliament will hold a special session on Thursday to vote on the plan to cap gas prices at A$12 ($8.14) per gigajoule and coal prices for power producers at A$125 per tonne. The move, announced late Friday, comes amid soaring energy prices that have resulted in windfall profits for miners and gas producers.

Albanese said he would be “stunned” if the opposition Liberal-National coalition voted against legislation to lower power bills for families.

Labor has a majority in the parliament’s lower house but needs the support of the Greens party in the Senate. The Greens have said it would oppose the bill if that includes proposals to compensate companies for any revenue loss from the price cap.

Albanese said the legislation would not contain any clauses on compensation.

“There is nothing in the legislation to provide any compensation, the legislation is very simple,” he said.