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ACCC to give more guidance to gas firms

Most fossil fuel company's net-zero commitments don't include short-term reduction plans.

Most fossil fuel company's net-zero commitments don't include short-term reduction plans. Photo: Getty

The corporate watchdog will provide more guidance as gas companies struggle to implement the government’s new price cap.

The Australian Competition and Consumer Commission will provide more information on how the cap will work after some gas retailers stopped accepting new industrial and commercial customers.

Retailers unable to secure supplies from producers are also letting expiring contracts fall onto expensive default tariffs.

The ACCC said it would investigate producers that might be trying to avoid supplying gas below the price cap under the cover of confusion.

“If we become aware that gas is not being made available and there is evidence that it was ­planned, or likely to be available or is being offered on terms which effectively equate to a refusal to supply, we will investigate whether that conduct may amount to an avoidance scheme,” it said in a statement.

Dr Chalmers said the ACCC would provide guidance to the gas market soon to clear up any uncertainty.

“We do need to remember this gas price cap, which is a substantial intervention in the market … only came in a few weeks ago,” he told ABC TV on Tuesday.

“Inevitably over the Christmas period, as businesses try and negotiate new deals, that won’t just happen immediately.

“There will be some issues as we implement this gas price cap … the ACCC will provide the kind of guidance which some players in the market have been seeking.”

The treasurer said the price cap, along with electricity relief being worked through with state and territory governments, would keep bills down.

“These are all important, considered measures we’re putting in place which recognise the pressure families, pensioners and businesses are under,” Dr Chalmers said.

“Inevitably when you’re imposing a price cap on an important part of the economy – these gas companies are doing incredibly well on international markets – they would prefer there wasn’t a price cap obviously but we need to do what’s right by the whole economy.”

Federal parliament was recalled before Christmas to pass the legislation for the temporary gas price cap following an agreement by the prime minister and state and territory leaders at national cabinet.

The price cap, which came into effect on December 23, applies to new domestic wholesale gas contracts by producers on the east coast.

Liberal MP Dan Tehan said the government had “created a mess” by rushing the legislation through.

“We were all brought back to parliament in a rush just before Christmas to rush through this legislation and then the government has gone on holidays,” he told ABC Radio.

He said the gas industry was in a state of flux trying to decode the new rules, including the “reasonable gas price” mechanism expected to be enshrined in a mandatory code of conduct by February

“You’ve got to remember, it’s the wholesalers that face the price cap – not the retailers,” Mr Tehan said.

“So the retailers are out there, left in limbo trying to work out how can they get a wholesale price, and the wholesalers don’t know what a reasonable price is going to look like and what they need to negotiate.”

– AAP

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