The ACCC has today published interim compliance and enforcement guidelines for the gas industry on the new Gas Market Emergency Price Order and explaining how the ACCC intends to exercise its enforcement role.
In December 2022, the Australian Government’s Gas Market Emergency Price Order introduced a temporary price cap of $12 per gigajoule (GJ) that principally applies to gas sold by east coast and Northern Territory gas producers and their affiliates to wholesale customers in Australia. The price cap will apply for 12 months.
“Our guidelines are intended to support the gas industry with their obligations to comply with the new laws, so the country experiences the intended benefits from these emergency measures,” ACCC Chair Gina Cass-Gottlieb said.
“While our primary objective is to achieve compliance with these laws, we are ready to exercise our enforcement powers in response to any alleged contraventions, particularly if we become aware of conduct that may be intended to circumvent the price cap.”
The maximum penalty for a company that breaches the emergency price order is the greater of $50 million or three times the value of the benefit obtained, or, if that value cannot be determined, 30 per cent of the company’s turnover during the period it engaged in the conduct.
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The price cap generally does not apply to supply contracts entered into before 23 December 2022 but may apply if a price provision in an agreement for supply in 2023 is varied. The price cap does not apply to sales of gas intended for international export.
The Gas Market Emergency Price Order allows gas producers and their affiliates to apply to the ACCC for a price cap exemption. Any parties that are granted an exemption will be listed on the ACCC’s public register.
As the ACCC hears from gas producers and users about their commercial negotiations with the price cap in operation, or observes matters of relevance to the operation of the new laws, it may update the guidelines if there are aspects that warrant refinement or clarification.