Australian Treasurer Jim Chalmers stated that measures to reduce gas costs would be put in place by Christmas, American media report. Speaking to media on the sidelines of G20 summit in Bali, Jim Charles noted that situation in the global economy is “hostile and high-risk.” He said that under such circumstances, government intervention may be necessary, including a cap on prices.
"We said that we’ll have a regime in place by Christmas but it’s important for me to send a signal to our international partners that what we’re trying to do here is to act without causing any problems with our trading relationships," Jim Chalmers said.
The Australian government has been ruminating about a gas market intervention since the release of the October budget. According to an official forecast, gas prices are expected to soar 40% by June 2024. Chalmers said that dire forecast is the key reason why the Australian government is plotting to regulate gas prices.
Economists claim that Australian energy sector is facing a 'perfect storm' right now, for a number of reasons. First of all it, these include sanctions against Russia as a major gas exporter. This has led to turmoil on the world energy market since gas supply is shortened and this turmoil ricochets in the Australian economy.
The second reason is coal plant outages. Coal is the biggest supplier of electricity in Australia. Local coal plants are outdated and many of them do not work properly. Often they just blackout. Last but not least is the weather factor. Winter will bump up demand for gas.
These three factor exercise tremendous pressure on Australia's energy market. This results in higher prices for consumers.