Oil and Gas News

QRC bid for delay on gas royalty hike

The Queensland Resources Council (QRC) has called the state government to delay the implementation of any gas royalty increase to January 1 2020.

It would enable industry and government to “work through confusion” in the draft legislation.

“We’re calling on the Premier and the Treasurer to hold off on any royalty increase until January 1 2020, instead of rushing it through the Parliament and adding to the existing confusion on domestic gas royalty impacts,” QRC chief executive Ian Macfarlane said.

“At the very least there should be an exemption for gas sold on the domestic market. We’re calling on the Treasurer to make that commitment as soon as possible.”

The Queensland Government introduced a royalty tax hike on domestic and export gas by 25 per cent as part of its 2019 state budget earlier this week.

This decision has drawn criticism from across the sector, saying the announcement was made with no consultation.

Queensland is the only East Coast state producing new gas resources to supply the domestic market. Given production in the Bass Strait is declining, that means Queensland gas will be more important than ever, according to Macfarlane.

“At the height of the East Coast gas supply squeeze, the ACCC said transport costs from Queensland to southern markets were already adding at least an extra $2 a gigajoule to the price for domestic users,” he said.

Macfarlane added that even though the price of gas has since come down from those peaks, nothing can reduce transport costs.

“The QRC looks forward to meeting with Premier Palaszczuk and the Treasurer as soon as possible to address these significant concerns with the legislation,” he concluded.

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