Australian National Cabinet to Cap Coal and Gas Prices

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Australia’s national cabinet has struck a deal that will cap the price of coal and gas, meaning consumers could enjoy cheaper energy prices.

According to Prime Minister Anthony Albanese, states will work to cap coal at $125 a tonne, and parliament will be brought back the next week to pass legislation that would help impose a temporary ceiling on gas at $12 per gigajoule.

The Commonwealth will also contribute up to $1.5 billion in energy bill assistance, which Mr Albanese claimed would serve as a deflationary measure and be matched and distributed to consumers and companies through the states.

The assistance will be offered to those receiving Commonwealth support payments, including retirees and Jobseeker recipients.

“Extraordinary times call for extraordinary measures,” Mr Albanese said.

“And we know that with the Russian invasion of Ukraine, we’ve seen a massive increase in global energy prices. And because Australia is not investing in enough of our energy assets, we are vulnerable to those international price movements.”

According to Treasury, the intervention will prevent price increases from exceeding 47.6% over two years, which is still a drastic increase for Australians but $230 less than they would have been otherwise.

The government vowed to lower electricity bill rates before the invasion of Ukraine and the ensuing turbulence on the world markets. Still, according to opposition leader Peter Dutton, it has not followed through on that promise.

“This government was elected with a promise to introduce a policy plan which would reduce electricity and gas prices,” Mr Dutton said.

Samantha McCulloch, president of the Australian Petroleum Production and Exploration Association, declared that the government’s interference put the security of the energy supply at risk.

“This heavy-handed, radical intervention has been conducted with no prior consultation with industry,” Ms McCulloch said.

However, since 90% of the state’s coal was mined for export, Queensland Premier Annastacia Palaszczuk expressed satisfaction with the outcome despite the lack of specific support for the industry.

The new deal could be a significant victory for consumers, who have long lobbied against rising energy prices. 

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