Gas reliant Australian manufacturing may be too dumb to survive

At the end of the day, bulk Australian gas consumers may simply too dumb to survive. At The Australian:

Top domestic gas users have used a high-level “code of conduct” meeting to push for a change in the benchmark method for east coast prices, arguing local manufacturers are paying a premium for the cost of export plants built by big LNG producers.

Alberto Calderon, chief executive of industrial buyer Orica, told the meeting the competition regulator’s LNG netback formula — effectively the price of LNG shipped overseas less processing and shipping costs — should be amended.

It says this cost of LNG capital accounts for $2 to $3 a gigajoule in the final price that domestic users pay for gas and should not apply given local manufacturers gain no benefit from the export facilities.

Of course, they shouldn’t be paying it but that’s kind of beside the point when the gas cartel simply ignores the ACCC measure anyway:

Bulk gas consumers should be focused on getting one of two outcomes. Either, LNG imports need to get up to break the gas cartel’s stranglehold on supply. Or, the Government must fix the price instead of it being linked to Brent oil. Given the latter is not going to happen then the former is the only option.

Do not rely upon the Morrison Gas Unplan which was bizarrely composed by supposed gas consumption champions that clearly have no idea what they are doing:

Aussie manufacturing gas consumers may just be too dumb to survive.

David Llewellyn-Smith
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Comments

  1. “Aussie manufacturing gas consumers may just be too dumb to survive”

    or

    Australia’s federal government may just be too dumb to allow gas price gouging, by not implementing a domestic gas reservation policy on the East coast.
    It’s the Australian people, the prosperity of the nation & future generations that is degraded when a significant competitive advantage is squandered because the government of the day is corrupt, compromised and is not acting in the best interest of the people. SH!THOUSE governance, incompetent and corrupt to the bone. @ScoMo #Scomo #Straya

  2. SH!THOUSE governance, incompetent and corrupt to the bone…

    Also true for whatever passes these days as their opposition, the ALP. Talk about (political) opportunities to wedge the government, totally missed… Add gas to the many. Now that’s SH!HOUSE.

    • agreed! two very bad options to vote for at the next election….

      then there’s SAP.. if only the LIBLAB stranglehold could be broken!

  3. Just shows that some of these big manufacturers are probably only “good” at making things . They certainly don’t appear to have the skills to drive a hard bargain when there’s one to be had. Perhaps its just inertia, the killer trait that leaves most Aussies paying far too much for their home loans,utilities insurance etc. because they can’t be arsed shopping around for a better deal. If manufacturers can’t costs where it’s bleeding obvious, perhaps they deserve to go under.

    • yeah, cos shopping around for large natural gas supply contracts will pay huge dividends when its a cartel of suppliers/exporters to deal with! They have the market all sewn up is the real problem, and Canberra seems to like it this way, evidenced by ten years of their complicit inaction.

    • and they wont just ‘go under’, they’ll go offshore… further hollowing out Australia’s flailing industrial capability/knowhow/economy/skills/jobs/self-sufficiency etc #NationBuilding stuff this!