The extreme measures the government must consider amid ‘apocalyptic’ energy crisis

The boss of the Australian Industry Group says rising energy prices will have an “apocalyptic” impact on households and businesses, and the federal government must consider extreme measures to ensure affordable supply.

“I was talking with a member yesterday. Let’s say his gas bill to make what the makes … went from $100,000 a year last week to a new contract $270,000,” CEO of the Australian Industry Group, Innes Willox told Neil Mitchell.

“He was told if he didn’t sign it it would be $500,000 next week.”

Mr Willox warned astronomical gas prices are likely to persist for years.

“Our estimate is that we’re in for the long haul here,” he said. “We’re looking at a two to three year problem at least.”

The federal government is urgently speaking to manufacturers about various options to bring down energy costs, with possible gas shortages in Victoria, South Australia and Tasmania flagged.

Federal Treasurer Jim Chalmers has indicated he’ll look into whether Australia can reduce the amount of gas it exports.

“In about 2016, when Malcolm Turnbull was Prime Minister … the government set up something called the Australian Domestic Gas Security Mechanism. What that means is that once a year the government can review if we do have enough gas in the domestic market,” Mr Willox said.

But he says doing so would have “huge consequences”.

“It would mean breaching contracts overseas, so it’s a last resort measure.”

Mr Willox says there are other options on the table which the federal government will likely consider first, including gas rationing.

“That’s the sort of thing that’s got to be considered,” he said.

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