Cartel pushes gas prices up, leaving businesses broke and Aussies jobless

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Gas power
The Woodside gas plant is seen at sunset in Burrup at the Pilbarra region in Western Australia April 18, 2011. Reuters/Daniel Munoz

After gaining control of Australia’s gas, a cartel is now pushing prices up. Businesses are getting broke, and it is killing the economy, an expert warned.

Aussies are dealing with huge increases in the prices of gas and electricity. A recycling business, for instance, said that its electricity bill was up to $180,000 from about $80,000 a month. Plastic Granulating Services had to close last month as it grappled with huge bills. It left at least 35 people jobless, and there are fears that more could deal with the same fate as further increases in gas and electricity are expected.

Some of the reasons power prices are soaring are the closure of cheap coal-fired power stations as well as rising gas prices. Warnings from power companies stress increases of up to 8 percent for residential customers this year.

According to an energy analyst, a gas cartel on the east coast of Australia makes the situation worse. Institute for Energy Economics and Financial Analysis’ Bruce Robertson said the Aussie gas cartel is restricting supply to the domestic market, forcing the prices to go up.

“It’s surprising how relaxed the Australian public is about this price gouge,” quotes him as saying. Several other countries facing the same situation, he said, would be rioting on the streets.

Robertson explained Australia’s gas prices are getting too expensive because “we have given away the ability to control the price.” He further warned it is killing the Australian domestic economy.

Now, people are spending more for gas in SA than they are in Japan. Increases to residential gas prices ranged from 23 percent in Victoria between 2006 and 2015 and to 74 percent in Tasmania during the same time period.

Industrial users have seen rises from 16 percent in Tasmania to 113 percent in North West Queensland. Robertson said there could be no disputes that Australia is paying more today than it should. He argued that the time for inquiries is gone and actions have to be taken. What Australia needs, he said, are details on how much it cost to build pipelines.

The Turnbull Government has announced measures on how it could get more gas into the market. Australian Prime Minister Malcolm Turnbull pledged to speed up gas market reforms to advance the gas trading and pipeline capacity trading markets. The Australian Competition and Consumer Commission (ACCC), meanwhile, is monitoring the entire gas supply chain.

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