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Energy lobby wants price cap scrapped in budget

The oil and gas industry is appealing to the government to remove a price cap on energy supply in the May budget and release more land for exploration.



Australia's oil and gas industry is urging the government to use the federal budget to remove a price cap on east coast energy supply and release more land for exploration. 


The industry has written to the government arguing these decisions will avoid supply shortages and provide affordable energy to consumers.


Australian Energy Producers chief executive Samantha McCulloch said the government needs to change policy on natural gas.


"New gas supply is urgently needed from coast to coast to ensure reliable and affordable energy for homes and businesses," she said. 


"We are calling on the federal government to work with gas producers, energy users and state governments on an action plan to bring on new supply to address near-term structural shortfalls."


The industry wants to stop the price cap imposed on the east coast gas market in 2023.


The cap was imposed after gas price increases that followed Russia's invasion of Ukraine.


The cap governs prices at a wholesale level. 


Some in the industry say artificially lower prices do nothing to encourage new market entrants. 


Also on the agenda is more land for exploration - a request sure to upset environmentalists.


The industry says there has been no land release since August 2022. 


Ms McCulloch said land releases previously happened annually and needed to resume for energy security and supply.


The energy producers group - which includes oil and gas giants such as BP, Santos, Shell and Woodside - also wants Australia to become a regional carbon capture, utilisation and storage hub.


This would help Australia achieve net zero carbon emissions by 2050, the group said.


The federal budget is due in May. 


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