The Australian Energy Regulator (AER) has today released its inaugural report into the competition and efficiency in wholesale gas markets. The Wholesale gas performance report 2026 provides an assessment of how aspects of the east coast wholesale gas markets are performing under their current structure, including short‑term gas markets facilitated by the Australian Energy Market Operator (AEMO), pipeline transportation and storage.
AER Board Member Jarrod Ball said the new report provides transparency on how short‑term facilitated gas markets are functioning as these markets play an important role in ensuring gas is delivered efficiently across the east coast.
“Overall, our report shows that short-term markets are functioning broadly as intended in the role that they are designed to play,” Mr Ball said.
“Short-term gas markets have grown significantly since their inception to be competitive and efficient. Pricing levels, which are generally below the cost of long-term contracts, indicate that the markets are helping to get additional gas to those users who need it.”
Short-term wholesale markets are not the primary driver of the prices households pay. Retail prices are more influenced by long-term supply, contracts and transportation costs.
“Wholesale spot markets help to keep gas flowing efficiently across the system, particularly during peaks, including trade over critical winter months,” Mr Ball said.
“But the prices customers ultimately pay are largely shaped by longer-term supply, production costs and contract arrangements.”
The report notes that east coast gas markets are operating under tightening supply conditions and rising production costs, which have been putting upward pressure on prices over time. It also notes that access to transportation and storage is critical, with key pipelines heavily contracted and ownership concentrated.
“These broader structural factors sit outside short-term trading markets but are central to understanding price pressures and reliability over the longer term,” Mr Ball said.
The AER continues to monitor international developments, including events in the Middle East, and any potential impacts on Australian gas markets particularly over critical winter months as demand increases.
While global LNG supply has tightened, domestic prices have remained steady as of late April 2026, with no evidence of increased purchasing by LNG exporters in short-term markets.
Notes to Editors
Understanding the wholesale gas market and this report
Under the National Gas Law, the AER is required to monitor and review the performance, level of competition and efficiency of short‑term gas markets facilitated by AEMO (the ‘facilitated markets’). We are also required to monitor and review financial risk management products and bilateral trading agreements, including their effect on the facilitated markets. This report does not assess household bills.
How the east coast gas market works
The east coast gas market is a complex, interconnected system covering gas supply, transport, storage and trading across all jurisdictions except Western Australia.
- Most gas is bought and sold through long-term bilateral contracts between producers, retailers and large users.
- These contracts remain the primary driver of market outcomes.
- Alongside this, a set of shorter-term, AEMO-operated markets, the facilitated markets, support day-to-day system operation and trading.
Gas is produced at various locations, then transported via high-pressure pipelines to LNG export facilities, gas-powered electricity generators, industrial users and major population centres.
What the facilitated markets do
The facilitated markets complement long-term contracts by supporting short-term trading, flexibility and transparency. They allow participants to:
- manage unexpected changes in supply and demand
- balance their positions where contract volumes don’t align with real-time needs.
Key markets covered in the report
Downstream spot markets:
- Victorian Declared Wholesale Gas Market (DWGM)
- Short-Term Trading Markets (STTM) in Sydney, Adelaide and Brisbane
These markets operate at major demand centres and are used to balance supply and demand in real time.
Gas Supply Hubs (GSH):
Located at Wallumbilla, Moomba, Culcairn and Wilton, these hubs facilitate short-term and forward trading of gas between participants.
Day Ahead Auction (DAA):
Enables access to unused pipeline capacity, allowing participants to secure transportation without negotiating long-term contracts.
This Wholesale gas performance report 2026 provides the first broad-ranging, long-term assessment that brings together our analysis of facilitated markets and pipeline service providers. It also draws on our earlier focus reports: