Weld Australia is calling on the Federal and State Governments to take immediate and decisive action to protect Australian manufacturers, following the release of new research from The Australia Institute showing that east coast gas exports have caused wholesale gas prices to more than triple and electricity prices to double since 2015.
According to the Australia Institute's report, average wholesale gas prices rose from $3.33 per gigajoule before exports began to $9.67 per gigajoule today—an increase of 190%. Electricity prices, closely tied to gas prices due to the National Electricity Market's pricing mechanism, have surged by 73% over the same period.
The decision to allow unrestricted gas exports from the Australian east coast gas market has led to a tripling of domestic wholesale gas and electricity prices. It has left Australians exposed to not only higher world energy prices, but also the wild fluctuations that events like the Ukraine war cause.
Geoff Crittenden, CEO of Weld Australia, warned that Australian manufacturers are bearing the brunt of these price hikes. "Gas exports have exposed Australian manufacturers to international price volatility and cost blowouts that are decimating their competitiveness. Our industry is already under intense pressure from subsidised imports. Rising energy costs are a double blow many can't survive," said Crittenden.
"It beggars belief that, for over a decade, governments have allowed LNG producers to export surplus uncontracted gas while Australian manufacturers struggle to secure affordable supply. The system is broken, and it needs to be fixed now."
The Australia Institute's research highlights how these price increases are no accident. Gas companies were explicit in their intention to raise domestic prices to match export markets. In 2014, Santos even told investors its Gladstone export terminal was "as much about raising the domestic gas price as it was about exports."
The price impacts are not limited to gas alone. As gas-powered generators often set the wholesale electricity price, manufacturers are being hit with inflated power bills due to the same export-driven dynamics.
Crittenden emphasised the urgency of reform. "Australia's manufacturing sector, particularly advanced fabrication, relies on energy certainty and affordability. The current approach prioritises profits for foreign-owned gas giants over Australian jobs, industry resilience, and energy security. That must change."
Weld Australia is urging both federal and state policymakers to:
- Implement a national domestic gas reservation policy to prioritise affordable supply for local manufacturers.
- Introduce export restrictions or quotas on uncontracted gas during periods of domestic shortfall.
- Support investment in electrification and renewable energy uptake for industry to reduce reliance on gas.
- Reform the National Electricity Market's pricing mechanism to curb the influence of high gas prices on electricity.
"We are standing on the edge of industrial decline. With the right policy settings, Australia can become a manufacturing powerhouse again. But unless we act now, we risk losing an entire generation of capability," said Crittenden.
The Australia Institute's report can be
