Australian Minister for Resources Madeleine King has revealed that the government is considering establishing a national gas reserve as a solution to future supply issues.
Ahead of the parliament being recalled on Thursday to vote on the government's plan for short-term energy price relief, King said that a national reserve would be considered as a long-term solution.
The parliament will debate the government's plan to cap the wholesale price of liquefied natural gas (LNG) at 12 Australian dollars (8.1 U.S. dollars) per gigajoule (GJ), less than half the average short-term price -- for 12 months.
The price of coal will be capped at 125 AUD (85 USD) a ton temporarily, with the government supporting producers whose costs exceed the capped price.
From the middle of 2023 the government will provide 1.5 billion AUD (1.02 billion USD) in assistance to homes and small businesses.
The plan was announced on Friday in response to soaring electricity prices. The government estimates that electricity prices will increase by up to 56 percent over the next 18 months.
King said on Wednesday that the government was considering all options to curb the increase including a national reserve.
"Given the extraordinary state of the market at the moment, we have to look at all options," she told Australian Broadcasting Corporation (ABC) radio.
"It's certainly something we can look into. It is complicated to retrofit a reservation policy after we've had an LNG export industry in place for a number of years but that doesn't mean it's impossible."
Representatives of the gas industry have pushed back against the proposed cap, arguing that it would grant the government "unprecedented powers" to intervene in the market.
Editor: Galia
