ACCC releases East Coast Gas Market Inquiry
The Australian Competition and Consumer Commission issues paper on the East Coast Gas Market Inquiry is one of the early steps in assessing competition in the gas market.
Chairman Rod Sims said the issues paper is seeking the views of industry and stakeholders about competitiveness in the market, and the ACCC is prepared for a huge task.
“We are undertaking extensive industry stakeholder consultation to understand better the reasoning behind claims about particular market behaviours or about shortcomings in the market,” Mr Sims said.
He said the ACCC has no preconception that there is illegal behaviour, or that position in the market is being inappropriately exercised to influence market outcomes.
“In an open economy and a well-functioning market, I would hope and strongly expect that industry would be striving to maximise returns for shareholders,” he said.
“However, the ACCC is well placed to investigate and assess any structural or other issues in the gas market that limit competition or prevent the gas market working as expected.”
In outlining the scope of the ACCC’s inquiry, Mr Sims said there is significant change occurring in domestic gas markets given the extraordinary developments with LNG export projects.
“There is a range of potential contributing factors that may be exacerbating the current uncertainty pervading the gas market,” Mr Sims said.
“The inquiry will test the veracity of these claims and seek hard evidence that either supports or disproves them.”
Mr Sims also called on industry participants to provide their views on market information and transparency.
“A common theme which is underlying many of the challenges facing the gas market in eastern Australia is a concern about a lack of information, or an asymmetry in access to information, on key components of the market,” he said.
Mr Sims said the ACCC can be a powerful contributor to an informed debate on the future of energy markets, and information flowing from this inquiry can assist in shaping energy market reform.
The ACCC East Coast Gas Inquiry will consider the competitiveness of wholesale gas prices and the structure of the upstream, processing, transportation, storage and marketing segments of the gas industry.
It commenced in April, 2015, in accordance with terms of reference, available on the ACCC website.
The inquiry is due to report to the government by April, 2016.
The ACCC issues paper is available here.