Prime Minister Scott Morrison has struck an agreement with major gas exporters to guarantee domestic supply at competitive prices.
The two-year deal is designed to ensure Australia does not experience a shortfall in supply at the expense of exports.
But the pact does not include formal price controls, which manufacturers had been pushing for, but were resisted by the gas industry.
Mr Morrison insists gas will be critical to the coronavirus economic recovery, with many manufacturing businesses reliant on gas to operate.
“Gas is critical to our economic recovery and this agreement ensures Australian businesses and families have the gas supply they need at the cheapest possible price,” he said on Thursday.
“This is about making Australia’s gas work for all Australians, while also supporting economic growth and backing important regional jobs in our expanding LNG sector.”
The deal will lock in gas exporters until 2023 as an extension to an agreement struck in 2017.
The spot price for gas has fallen from between $10.50 and $12.50 a gigajoule to between $5 and $7 a gigajoule since that deal was signed.
The new deal commits exporters to offer uncontracted gas to the domestic market on competitive terms before it is sold overseas.
But the Australian Workers’ Union, which represents gas and manufacturing workers, accused the prime minister of caving into exporters and favouring foreign nationals over Australia.
“By rejecting price controls, or any other measures to ensure Australian gas reaches Australian employers at a reasonable price, Mr Morrison’s deal is basically identical to the weak and pointless bargain negotiated by Malcolm Turnbull,” AWU national secretary Daniel Walton said.
“Australia is lucky enough to have some of the most abundant gas reserves in the world. Morrison’s deal ensures that advantage will be squandered as our local manufactures cop gas prices higher than global competitors.”