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8226.0 - Electricity, Gas, Water and Waste Services, Australia, 2006-07 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 09/07/2008   
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Contents >> Gas supply industry >> Industry background

INDUSTRY BACKGROUND

The current gas supply industry reflects the results of the restructuring which began in the early 1990s. The terms of the 1997 National Gas Pipelines Access Agreement required that legal restrictions to full retail contestability (FRC) be removed in order to give all gas users their choice of supplier. On 1 July 2007 Queensland introduced FRC, with the result that now all states and territories, except the Northern Territory, permit all customers to enter a supply contract with a retailer of their choice. There are no immediate plans for introduction of FRC in the Northern Territory, given that there is no household distribution network and the low number of business customers.

In April 2007, the Council of Australian Governments agreed to establish a National Energy Market Operator (NEMO) by June 2009. As for electricity, the NEMO will become the operator of the wholesale gas market and will be responsible for national transmission planning.

As in the electricity supply industry, vertically integrated businesses have formed separate business units to undertake various stages of distribution and other activities. Increasingly, competition has been introduced along the various stages of the distribution chain with the entry of new businesses.

These changes to business structures have a direct impact on the data presented in this publication, but not all impacts are in the same direction. Where several smaller specialist business units wholly classified to the gas supply industry have been created from one vertically integrated business, transactions between these businesses are recorded in the statistics (such as sales from the distributing business to the retail business). Previously, such transactions were internal to a single business and generally were not recorded in the statistics.

Over time, as the market continues to develop, businesses have gradually rationalised and restructured their operations. This has resulted in several businesses widening their networks through corporate takeovers to include activities not previously undertaken by gas supply businesses. Conversely, some activities previously undertaken by gas supply businesses are now being undertaken by businesses classified to other industries, in particular, electricity supply and pipeline transport.

The volume of gas (natural and manufactured) available for issue through mains increased, by 6.3% between 2005-06 and 2006-07, from 796 to 846 Petajoules. (Manufacturing Production, Australia, June 2007, ABS cat. no. 8301.0.55.001). The Consumer Price Index relating to Gas and Other Household Fuels (weighted average of eight capital cities) indicates that prices for household consumers were 4.3% higher in 2006-07 than in 2005-06.





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