The AER has conducted this review of wholesale gas markets and pipeline service operators under the National Gas Law, which requires us to monitor competition and efficiency in wholesale gas markets and the behaviour of gas pipeline service providers.
This 2026 report is the first broad ranging assessment that examines these elements together and provides an assessment of whether there are market features that may be detrimental to effective competition or the efficient functioning of the market.
This report focuses on the performance of markets facilitated by the Australian Energy Market Operator, which are primarily used by participants to trade gas in the short term. We have also assessed related aspects of wholesale gas markets. This includes bilateral markets for pipelines, storage and financial products, and (if relevant) long-term gas supply agreements.
Key findings from the report include:
- Overall, faciliated gas markets are performing well. These markets support efficient short-term trading, liquidity and transparency. They are relatively competitive and play a supporting role (to long term contracts) in helping participants manage short-term needs and portfolio positions.
- Liquidity and price transparency can be strengthened. Thin trading in some products, especially ASX financial products and longer-term Gas Supply Hub products limits the strength of price signals.
- Prices have stabilised, but risks remain. Prices have eased since the volatility of 2022, but supply-demand pressures, winter demand and global LNG market conditions can still drive high price events.
- Electricity and gas market outcomes are increasingly linked. Variable gas-powered generation demand can affect downstream gas prices, particularly when electricity prices are high or gas winter demand is strong.
- Supply, transport and storage constraints are increasing risks for southern markets. Declining lower-cost southern production and higher production costs are contributing to higher prices. Greater reliance on key north-south pipelines and southern storage makes access to capacity critical for competition and reliability.
- LNG exports have increased exposure to global market risks. Domestic prices are now more linked to volatile international oil and gas markets, with geopolitical events creating further price risk.