The Australian Government has announced its Mandatory Gas Code of Conduct is now a law, securing reasonably-priced gas for Australian gas users.
The Gas Code will also give producers the security they need to invest in supply, as well as assist Australia in maintaining its reputation as a reliable trading partner.
The Code has been registered and will go into effect tomorrow.
The Federal Government noted that producers have already committed to at least 260 PJ of domestic supply through 2027. According to the ACCC and AEMO assessment, these indicated promises lower the possibility of deficits.
The final Code was developed following consultation with gas producers and users to verify its suitability.
The industry welcomed the final design when it was announced in recent weeks, with the Energy Users’ Association of Australia saying: “Our expectation is that the Code will make it easier to contract gas in Australia at reasonable prices and with reasonable contract terms.”
The Gas Code will ensure fair domestic pricing by providing a price anchor, or mechanism to drag prices down, through the combination of:
- A price cap, which will be set at $12/GJ and will be reviewed on 1 July 2025;
- A process for qualifying for exemptions from the price ceiling based on satisfying ACCC and court-enforceable supply commitments; and
- Allowing small gas producers that exclusively supply the domestic market to be exempt from the price cap.
Furthermore, it compels all parties to follow standards of conduct to level the playing field between users and producers and offer a more functional, competitive gas market.
The Gas Code is supported by a strong enforcement framework administered by the ACCC, with a review to be conducted no later than two years following its implementation to ensure that it is effective and suitable for its purpose.
