Notice of Australian Competition and Consumer Commission (ACCC) inquiry into gas markets

Overview

The Competition and Consumer Act 2010 was enacted to regulate and promote competition and fair trading in the Australian marketplace, ensuring consumer protection and preventing anti-competitive practices. The 2015 inquiry into the gas markets by the Australian Competition and Consumer Commission (ACCC) was introduced to address the problem of potentially uncompetitive and non-transparent practices within the wholesale gas industry. The ACCC, which is the body responsible for enforcing the Act, was tasked with examining the competitiveness of gas prices and the structure of various segments within the gas industry, including upstream production, processing, transportation, storage, and marketing. The inquiry was commissioned by the Parliament of Australia and aims to identify any anti-competitive behaviour, barriers to entry, and other factors that may affect the competitiveness and transparency of gas prices and supply. The ACCC's report on the inquiry is expected to provide valuable insights into the gas market, assisting in the formulation of policies and regulations to ensure fair competition and protect consumers.

Scope and Application

The Australian Competition and Consumer Commission (ACCC) has been mandated to conduct an inquiry into the wholesale gas industry under Part VIIA of the Competition and Consumer Act 2010, focusing on the competitiveness of wholesale gas prices and the structure of various segments within the industry, including upstream, processing, transportation, storage, and marketing. This inquiry is geographically focused on states such as Victoria, New South Wales, the Australian Capital Territory, South Australia, Queensland, and Tasmania, but is not limited to these regions. The inquiry will delve into aspects such as the availability and competitiveness of gas supply offers, the competitiveness and transparency of gas prices, market structures for gas production, processing, and transportation, barriers to entry into the upstream production sector, anti-competitive behaviours and their impact on gas purchasers, as well as transaction costs, information transparency, and contractual terms and conditions influencing market competitiveness. Notably, the inquiry will exclude competition in retail gas markets. The ACCC is required to submit its findings to the Minister for Small Business by 13 April 2016, and will facilitate this through the establishment of an inquiry section on its website, the release of an issues paper, the acceptance of written submissions, and potentially the conduction of public hearings.

Key Provisions

The main operative sections of this legislation, C2015G00557 (Gazette), pertain to the directive for the Australian Competition and Consumer Commission (ACCC) to conduct an inquiry into the wholesale gas industry under Part VIIA of the Competition and Consumer Act 2010 (s.1). This inquiry is tasked with examining various aspects of the gas industry, including the competitiveness of wholesale gas prices and the structure of the upstream, processing, transportation, storage, and marketing segments (s.2). Notably, the inquiry will focus on geographical areas such as Victoria, New South Wales, the Australian Capital Territory, South Australia, Queensland, and Tasmania (s.2). The matters to be considered in the inquiry encompass the availability and competitiveness of gas supply offers, the competitiveness and transparency of gas prices, the competitiveness of access to gas production, processing, and transportation, barriers to entry into the upstream production sector, potential anti-competitive behaviour, and factors influencing market competitiveness (s.3). The obligations imposed by this legislation on the ACCC include conducting the inquiry into the wholesale gas industry, examining specified market aspects, and preparing a report to the Minister for Small Business by no later than 13 April 2016 (s.4). The ACCC is also required to establish a dedicated section on its website for this inquiry, release an issues paper, and invite written submissions from relevant parties (s.5). Additionally, the ACCC must hold public hearings as part of the inquiry, with the specifics of these hearings to be determined and published at a later date (s.6). The inquiry is explicitly directed not to examine competition in retail gas markets (s.2). In terms of potential breaches of this legislation, there are no explicit offences, penalties, or civil/criminal consequences mentioned within the text. However, the ACCC’s role in conducting a thorough and comprehensive inquiry suggests that any failure to adhere to the outlined obligations could lead to scrutiny or potential repercussions from the Minister for Small Business or other relevant authorities. The directive emphasizes the importance of the inquiry’s findings in understanding the gas market dynamics and ensuring fair competition within the wholesale gas industry.