Australia is planning to cap coal and gas prices for a year in a bid to shave utility bills for households and businesses hit by soaring costs because of Russia’s invasion of Ukraine, Australian Prime Minister Anthony Albanese said yesterday.
Gas prices would be capped at A$12 (US$8.11 dollar) per gigajoule, while the limit for coal would be A$125 per tonne for 12 months, with the Australian government supporting coal producers whose costs exceed that figure, he said.
“Extraordinary times call for extraordinary measures, and we know, with the Russian invasion of Ukraine, what we’ve seen is a massive increase in global energy prices,” Albanese told reporters after a Cabinet meeting that included state leaders.
Photo: Reuters
The government also agreed to provide assistance of up to A$1.5 billion to homes and small businesses, starting from the second quarter of next year.
The gas price cap would apply to new wholesale gas sales by producers on Australia’s east coast.
At A$12, it is less than half the average short term gas price of A$26 per gigajoule in the third quarter of this year, data from research group EnergyQuest showed.
The coal price cap would apply to coal used in power generation, the government said.
The cap of A$125 is about half the A$249 a tonne average selling price Banpu PCL achieved for its Australian coal in the third quarter.
Gas producers had urged the government not to impose the price cap, saying it would deter future investment in supply, which would be key to driving down prices in the long term, and could damage Australia’s reputation for foreign investors.
Producers that could be hit by the gas price cap include ExxonMobil Corp, Shell PLC, Origin Energy Ltd, Woodside Energy Group, Santos Ltd and South Korean steel giant POSCO International Corp’s Senex Energy.
“The uncertainty caused by the federal government’s plan to impose a price cap in the eastern Australian gas market has already destroyed the confidence both buyers and sellers need in order to complete the transactions that will ensure energy supplies to households and businesses,” a Woodside spokesperson said.
Coal producers that would be affected include Glencore PLC, Banpu Resources Australia, Coronado Global Resources Inc and Peabody Corp, which supply coal to power plants in New South Wales and Queensland states.
Coal producers declined to comment until they see further details on how the price cap would work.
The Australian Industry Group welcomed the price caps, but said they were not the best solution.
“They will be messy to implement ... but they look likely to be very helpful in dampening the immediate economic pain of this global energy crisis,” group CEO Innes Willox said in a statement.
However, power producers, represented by the Australian Energy Council, said it was unclear whether electricity bills will fall anytime soon, because energy retailers and generators that hedge their risks have already settled their contracts for the next 12 months on the basis of higher prices.
“If more lower priced fuel is available, over time those savings may lead to lower wholesale electricity prices, but that will take time to flow through to end users,” council chief executive Sarah McNamara said in a statement.
UNPRECEDENTED PACE: Micron Technology has announced plans to expand manufacturing capabilities with the acquisition of a new chip plant in Miaoli Micron Technology Inc unveiled a newly acquired chip plant in Miaoli County yesterday, as the company expands capacity to meet growing demand for advanced DRAM chips, including high-bandwidth memory chips amid the artificial intelligence boom. The plant in Miaoli County’s Tongluo Township (銅鑼), which Micron acquired from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion, is expected to make a sizeable capacity contribution to the company from fiscal 2028, the company said in a statement. It would be an extended production site of Micron’s large-scale manufacturing hub in Taichung, the company said. As the global semiconductor industry is racing to reach US$1 trillion
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
Memory chip stocks extended their losses yesterday after Alphabet Inc’s Google publicized research that could allow more efficient use of the storage needed for artificial intelligence (AI) development. SK Hynix Inc and Samsung Electronics Co, South Korean leaders in the market, fell more than 6 percent and about 5 percent respectively in Seoul. In the US, Micron Technology Inc, Western Digital Corp and Sandisk Corp slid more than 2 percent in pre-market trading, after they all closed lower on Wednesday. Memory companies have been on a tear in recent months as the rapid development of AI infrastructure triggered a spike in chip
RSS