Australia’s looming gas shortage is three times bigger than first thought, says Prime Minister Malcolm Turnbull, who has warned east coast gas companies that export restrictions are “ready to go”.

But the decision to once again delay pulling the trigger on the long-awaited restrictions was quickly slammed by Labor, which argued the government was “all talk and no action”.

Instead, the government will give major east coast companies a final chance to demonstrate there will be sufficient local gas supply next year.

Mr Turnbull said two reports received by the government on Monday – from the Australian Energy Market Operator and the Australian Competition and Consumer Commission – showed the shortfall of gas in the east coast domestic market would be “considerably higher than that estimated six months ago”.

“At this point, it’s estimated there will be a shortfall of around 110 petajoules of gas, more than three times the figure we were advised earlier in the year,” he said.

Bill Shorten says gas export restrictions should be imposed now. Photo: AAP

Flanked by Treasurer Scott Morrison and Energy Minister Josh Frydenberg, Mr Turnbull said if the companies could satisfy the government and the competition watchdog “then the foreshadowed export control mechanism will have done its work”.

Opposition Leader Bill Shorten criticised the decision not to “pull the trigger” on gas export restrictions, saying that the Prime Minister’s solution was to “write a letter to gas companies and hope they fix it”.

“Turnbull just admitted a huge gas shortfall. As I’ve been saying, it’s time to pull the trigger on export controls. Why does he refuse?” he wrote on Twitter.

Labor’s energy spokesman Mark Butler said Australian companies were paying twice the price for gas that they should be according to the consumer and competition watchdog.

Australian gas was being sold cheaper to markets in Japan, China and Taiwan than domestically, he said.

Mr Butler said the government’s mechanism had been designed for a decision to be made by September 1.

“But all we’ve seen is more delay and no reason for this delay,” he said.

“The Prime Minister gave no reason why with all the information he now has at hand, he hasn’t acted today to impose export controls on Australian gas.”

In April, the government announced the creation of the Australian Domestic Gas Supply Mechanism that would allow it to impose gas export restrictions.

That was prompted by warnings from the regulator that Australia was facing a gas shortage, which the government argues was caused by the former Gillard government’s decision to allow east coast companies to export gas to Asia during the resources boom.

The gas companies – including Santos, Origin and Shell – are opposed to the imposition of export restrictions.

On Monday, Mr Turnbull also once again hit out at the Victorian and New South Wales state governments for imposing restrictions on gas exploration.

“Queensland is an honorable exception, Queensland is producing most of the gas on the east coast of Australia,” he said.

“But both Victoria and New South Wales are not doing enough.”