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. FRC was legislated in Tasmania in December 2000, and introduced in NSW and the ACT in January 2002 and in Victoria in October 2002. Western Australia introduced market reforms to the retail gas market in May 2004. These reforms include the introduction of FRC and several new customer protection mechanisms. Natural gas was introduced into Tasmania by pipeline from Victoria by June 2004. South Australia implemented FRC in July 2004 and Queensland in July 2007. 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.
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.
Cold weather in many parts of Australia in autumn and early winter of 2006 increased demand for gas from domestic and commercial customers, whereas demand from larger industrial users was mainly stable. The volume of gas (natural and manufactured) available for issue through mains increased slightly, by 0.4% between 2004-05 and 2005-06, from 793 to 796 Petajoules. (Manufacturing Production, Australia, June 2006 (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 5.0% higher in 2005-06 than in 2004-05.
Print Page
Print All