‘Chaos and pain’: wholesale gas prices capped in energy market

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Australian Industry Group chief executive Innes Willox described the energy price rises across the country as “apocalyptic”.

An extraordinary spike in wholesale gas prices in Victoria of more than 50 times normal levels has prompted the Australian Energy Market Operator to intervene and impose a price cap, in a widening of the fallout since

The shadow price for gas that would apply if the cap were not in place spiked again on Tuesday morning to an unheard-of $800 a gigajoule. Manufacturers typically pay less than $10/GJ.

“The price pain is already intense for those businesses who’ve found themselves suddenly needing new energy contracts amid local and global turmoil,” he said.“Households will feel the punch from higher default electricity prices from July, and more pain is coming for all.”Causmag International, a NSW magnesium products manufacturer that was a Weston customer but is now being asked to pay more than $40/GJ for gas, has been unable to find alternative supplies.

Josh Stabler, managing director of energy adviser Energy Edge, noted that three of the four east coast domestic gas markets were now being administered by the AEMO under imposed price caps.Prices started to be controlled in the Sydney and Brisbane markets last week, at about $28/GJ in Sydney and $40/GJ in Brisbane, Energy Edge said, based on rules triggered when Weston’s customers were transferred to “retailers of last resort”.

Victoria’s situation was being exacerbated by very cold weather expected to hit over the next few days from a so-called “polar surge”, resulting in forecast gas demand for the retail market of 1247 terajoules a day, exceeding last year’s peak, Mr Stabler added. Gas demand in Victoria on Wednesday is forecast to be 92 per cent higher than the same day last week, he said.

 

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Kind of dramatic like winter being called a polar blast…bushfires are wildfire etc. yawn.

Across the world, actually.

as a big exporter we are NOT benefiting local consumers The gas miners r making most of the profit n they dont pay tax We r being ripped off twice We need local reserve 15% plus domestic discount 20%

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