Government eyes energy crisis quick fixes

November 04, 2022 04:33 PM AEDT | By AAPNEWS
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Possible big stick solutions to skyrocketing energy prices will be considered by senior federal ministers next week. 

The Albanese government has been weighing up further regulatory intervention in the gas market since it revealed forecasts for a sharp uptick in energy prices in its first budget.

Treasury forecasts Australian energy prices rising by 56 per cent and gas lifting by 44 per cent over two years.

The government has left several options on the table to drive down energy prices, including a price cap, taxes and subsidies for energy users.

Prime Minister Anthony Albanese urged cooperation between government and industry on the matter.

"But that should not be read as we are not prepared to take action if the energy suppliers are not prepared to co-operate here," he told reporters in Queensland on Friday.

"We know that there has been substantial increases in profits at the same time as families and businesses are hurting from the increased charges and that is why we want to work through for a solution as a matter of priority."

He said Treasurer Jim Chalmers, Energy Minister Chris Bowen, Resources Minister Madeleine King, and Minister for Industry and Manufacturing Ed Husic were working collaboratively to nail down the best option.

Sky-high energy prices are also expected to keep inflation higher for longer, with energy prices - plus the floods in southeast Australia - prompting the Reserve Bank to upgrade its peak inflation forecast to eight per cent.

The RBA said it was unclear exactly how much inflated domestic electricity and gas prices would fan inflation. 

"How far and how quickly this flows through to retail bills, and how large the second round effects on businesses' costs and prices will be, is hard to predict," the central bank said in its statement on monetary policy. 


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