Prime Minister Malcolm Turnbull has promised cheaper energy – and that wholesale gas prices will halve – under tough new regulations to be imposed on gas exporters.

On Thursday, the government said it would push ahead with export restrictions on east coast gas companies in a bid to reduce prices and ensure local supply amid a looming energy crisis.

“It is ridiculous for us to be on the edge of becoming the largest LNG exporter in the world and not have to have enough gas for our businesses, for our households, for industries,” Mr Turnbull said. 

Speaking earlier on ABC Radio, he said the new restrictions would ensure the price of gas in Australia would now be comparable with the international market.

“It will be cheaper than the prices being offered now. People are being offered prices of $20 a gigajoule, it should be around half that or less,” he said.

He later clarified that the bulk of the benefit would be enjoyed by business, not households, and claimed the measure would save up to 65,000 jobs.

“This is not saying that all gas prices will be halved as a result of these changes,” he said.

“Wholesale gas, for example, if you’re a household, a family, the wholesale price of gas is between 15 and 20 per cent of the cost on your gas bill because the gas company has to get the gas to you.” 

The reforms are expected to reduce power prices. Photo: Getty

Under the new mechanism announced on Thursday, the Resources Minister could restrict exports based on advice from the Australian Energy Market Operator and the Australian Competition and Consumer Commission.

It follows two meetings between the Prime Minister and east coast gas companies, such as Santos, Origin, ExxonMobil and Shell, in which Mr Turnbull warned that they operated with a “social licence”.

To avoid restrictions, companies would have to show how they would meet the shortfall of domestic gas through their own overall production and exports.

Labor initially appeared to warm to the government’s plan, before later suggesting that it appeared to be another “talkfest”.

“I think the gas companies now need to confirm that gas prices are going to drop in the radical nature which Mr Turnbull has promised on radio this morning,” Opposition leader Bill Shorten told reporters.

The new regulations, which will take effect from July 1, have been welcomed by industry groups but slammed by the association representing gas companies.

“Restricting exports is almost unprecedented for Australia,” Australian Petroleum Production and Exploration Association Chief Executive Malcolm Roberts said.

“At a time when we need billions in new investment to create more gas supply, any intervention that creates sovereign risk is alarming.”

Resources Minister Matt Canavan has previously criticised restrictions on exports, telling Sky News: “We don’t make sure that we have enough scotch fillet in the supermarket by telling farmers they can’t sell their beef or cattle overseas markets.”

On Thursday, Mr Canavan appeared to do away with his earlier analogy: “Gas is the bread and milk, a staple and that’s why we are acting to make sure they are reasonably priced and secure prices for businesses.”

In March, the Australian Energy Market Operator warned New South Wales, Victoria and South Australia were facing power blackouts in the next two years due to reduced domestic gas production.

Speaking to reporters on Thursday, Mr Turnbull said the measure was a “short-term” solution and again called on state governments such as Victoria to lift restrictions on gas exploration.