The head of Australia's competition watchdog warns gas shortages are making manufacturing "impossible" for some businesses and could cause factory closures and job losses.
Australian Competition and Consumer Commission chairman Rod Sims says industrial gas users are facing a real crisis as most are facing price shocks, depending on their alternatives.
Mr Sims told the Australian Domestic Gas Supply Outlook in Sydney on Tuesday that many industrial users have no alternatives to gas, which make up five per cent to 40 per cent of their input costs, and are facing extreme consequences.
"How can these companies invest and plan with such high and uncertain gas prices and with considerable supply uncertainty," he said.
"At worst, plants will close and jobs will be lost purely as a result of the current gas crisis.
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"Australia often makes it hard to be involved in manufacturing. We are now making it extremely difficult if not impossible for some."
Mr Sims blamed the looming shortages and associated price rises on a recent trebling of demand due to the growth of gas exports, lower global oil prices and state regulations and moratoria on the gas supply development.
He said he understood there were social and environmental reasons behind the Victorian government's moratorium on the exploration and development on onshore gas until 2020.
However, he said the ban came would likely increase gas costs for households and industrial users and said that state governments in general should consider assessing projects on a case-by-case basis.
"As we feared, without new gas supply from a range of basins and producers, there are significant implications for gas prices and gas availability, particularly in the southern states," he said.
