East coast gas prices have fallen to their lowest quarterly average in five years during the June quarter, defying elevated international energy market prices, according to the Australian Energy Market Operator (AEMO).
AEMO’s latest Quarterly Energy Dynamics report revealed domestic gas prices on the east coast averaged AU$9.08 per gigajoule (GJ) over the quarter, down from AU $12.36/GJ during the same period last year.
The domestic price came in at less than half the international liquefied natural gas (LNG) netback price of AU $20.84/GJ.
Industry body Australian Energy Producers said the figures demonstrate that a well-supplied local market is shielding Australian households, businesses, and manufacturers from broader global energy volatility.
The findings arrive as the federal government works to finalise its proposed national gas reservation framework. Australian Energy Producers CEO Samantha McCulloch urged the government to design the policy in a way that actively encourages ongoing investment in new gas fields.
“East coast gas prices are already at their lowest quarterly level in five years, demonstrating what a well-supplied domestic market can deliver for Australian households, businesses and manufacturers,” McCulloch said.
“The government’s reservation framework should build on this by encouraging the new investment and supply needed to keep downward pressure on prices as existing gas fields decline.”
McCulloch warned that forcing a structural oversupply into the market could backfire by discouraging new capital investment, ultimately harming long-term affordability.
The report also highlighted the critical role of gas in stabilising the power grid during periods of low renewable output. On June 22, gas-fired electricity generation hit a daily average peak of 3,328 megawatts following a prolonged period of low wind across southern states.
“Gas-fired generation will play an increasingly important role in backing up a growing share of renewables and as coal-fired generation retires.
“The AEMO report is yet another reminder that continued investment in new gas supply and infrastructure is essential,” McCulloch said.
