The International Gas Union’s (IGU) Wholesale Gas Price Survey has been released, showing that Australian gas prices remain competitive when compared with large manufacturing neighbours in Asia.
The average Australian price, listed in the report at $US5.28 per million British thermal units (MMBTU), was significantly lower than in Asia and Asia-Pacific regions.
The main Asian LNG importing nations of Chinese Taipei, Japan, South Korea, China, Thailand, and Singapore all recorded higher wholesale prices, while the Asian market average was 20% higher than Australia’s overall. The countries with the lowest gas prices in IGU’s ranking meanwhile tended toward those with regulated markets where gas is sold below the cost of production and transportation, such as Venezuela, Turkmenistan, and Algeria.
While wholesale gas prices have increased in Australia over the last decade, they have done so in line with other services like childcare, healthcare, water and sewerage, and property rates, according to information from a recent Australian Bureau of Statistics Consumer Price Index covering the period 2009-2019.
Australia is an expensive country. We enjoy an exceptional standard of living with our average wages being the eighth highest in the world according to the Organisation for Economic Co-operation and Development (OECD). That Australia is an expensive place in which to do business is also well known.
This expense also extends to Australia’s gas industry, where wholesale prices are largely in line with expectations given ongoing domestic development restrictions and high transport costs associated with distribution to major demand centres.
The path to reduced gas prices in Australia is increased exploration and development closer to major population and manufacturing centres. This is the most effective way to increase Australia’s competitiveness internationally, boost gas supply, and lower costs.
The full IGU survey can be read .