A government-enforced cap on gas prices is needed as two peak bodies warn the dramatic spike in energy costs is pushing cash-strapped businesses and manufacturers to the brink.

The Australian Council of Social Service said regulation of the market was needed to ease the “crushing” cost of living facing three million Australians living in poverty.

“This is a market that is out of control at this time,” ACOSS CEO Cassandra Goldie said on Tuesday.

“We need to protect people from the ravages of what is happening to the price of the energy bills they are receiving.”

The cap on wholesale prices should be set to the five-year average spot price of $8 to $10 per gigajoule, ACOSS and the Australian Workers’ Union says.

Prices have been three times that this year in most markets, according to the Australian Energy Regulator.

ACOSS and the AWU said any intervention must also include price caps on coal and electricity, be complemented by commitments to encourage energy efficiency for households and industry, and consider the broader tax arrangements applying to resources companies to ensure the current crisis was not repeated.

Almost everybody on income support was already in severe rental distress, making increases in electricity prices particularly alarming, Ms Goldie said.

“They do not have room to move on their budgets.”

AWU national secretary Dan Walton said without action, Australia was moments away from job losses and quality manufacturers going under.

“Our nation was set up with energy being our competitive advantage,” he said.

“That competitive advantage is disappearing into the back pockets of multinational gas companies and multinational coal companies.”

Prime Minister Anthony Albanese has said a price cap on gas is an option as he prepares to meet state and territory leaders next week over rising energy prices.

He will chair a meeting of the national cabinet on December 7, in a bid to deliver on his promise to take action on prices before Christmas.

Treasury boss Steven Kennedy told parliament on November 8 he believed the war in Ukraine had led to abnormally high prices and profits for gas and coal companies, demanding an unconventional response.

Direct interventions to address higher domestic coal and gas prices were “most likely to be optimal”, he said.

The Mining Council of Australia has said any proposed tax on the coal and gas industry would be “perverse” and put at risk the industry’s investment in Australia.

-AAP