The Australian Government has implemented the Gas Market Code (the Code), as part of the Energy Price Relief Plan announced in December 2022. This will ensure east coast gas users can contract for gas at reasonable prices and on reasonable terms.
The Code is an important addition to Australia’s east coast gas market. Key elements of the Code include:
- a price cap, set at $12/GJ to anchor wholesale contract negotiations between gas producers and buyers (this supersedes the temporary emergency price order cap of $12/GJ, which expired on 22 December 2023.
- an exemptions framework to incentivise producers to commit additional supply in the short term and facilitate new investment in the medium term to support access gas at reasonable prices and on reasonable terms
- transparency obligations, including additional reporting to the ACCC, to increase visibility of the amount of uncontracted gas to be produced, and timing when it will be available to the domestic market
- conduct obligations aimed at reducing bargaining power imbalances between gas producers and buyers and establishing minimum conduct and process standards for commercial negotiations.
The Code commenced on 11 July 2023, with a 2-month transitional period to allow companies to adapt to new conduct provisions, record keeping and reporting obligations. The transitional period ended on 11 September 2023.
A fact sheet (DOC 91 KB) provides information on:
- the key elements of the Code
- how it is structured
- high-level information on how it operates.
The ACCC provides guidance on how it will monitor and enforce the Code. This guidance is published on the ACCC website.
Producers can apply for conditional exemptions from provisions in the Code. These will be considered by the Energy Minister and the Resources Minister.
See details of conditional Ministerial exemptions that have been granted to date.
The government consulted on questions relating to the design of the Code between 9 December 2022 and 7 February 2023. Over 60 submissions were received.
A second round of consultation was undertaken between 26 April and 12 May 2023. This was to allow stakeholders to consider an exposure draft of the Code. Over 40 submissions were received.
Measures to mitigate global energy price rise crisis 14 December 2022
First round of consultation - Options to ensure the domestic wholesale gas market delivers for Australians
Second round of consultation - Gas Market Code: Consultation paper and draft regulations