Shell caves in and, after the freeze, turns on the taps for cheap petrol

Energy giant Shell has ended the freeze on east coast gas producers and is offering new supply deals for the domestic market that companies imposed in December after the Albanian government imposed price caps.

The multinational’s resumption of wholesale gas offers comes just days after the National Consumer Protection Agency warned the gas industry that it must immediately offer supplies that meet the new price cap of $12 per gigajoule or face $50 million in fines.

Shell’s Queensland-based gas company QGC told customers Monday it was again accepting bids for 8 petajoules of wholesale gas supply for 2023. The new deliveries are in addition to the 20 petajoules it has been offering domestically since December, it said.

The federal government enacted new legislation in December to impose an unprecedented $12 per gigajoule price cap on wholesale gas sales for the next 12 months to tame rising energy prices, and told the industry it plans to develop a mandatory code of conduct to forcing producers to sell gas at “reasonable” prices to local buyers.

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The federal Treasury Department had forecast that gas bills for homes and businesses on the East Coast would rise more than 40 percent by next year if left unchecked.

However, the price caps have been opposed by gas producers, who have halted bids over complaints of gray areas in the rules that could have resulted in unintentional breaches and hefty penalties.

Shell and Woodside, two of the East Coast’s largest gas producers, paused on plans to offer new large-scale gas contracts to local retailers or heavy industry last month as they assess the legal implications of the federal government’s intervention.

Producers also told the government the new rules would discourage investment in key new projects and increase the risk of deficits, which the Australian Competition and Consumer Commission says could hit NSW and Victoria in the years to come.