Will the gas reservation plan cut your gas bill?

Updated 3 November 2026 with the latest figures.

Wholesale gas on the east coast averaged $10.77 a gigajoule in the September quarter, the Australian Energy Market Operator (AEMO) said in October. That is up from $9.08 in the June quarter, but down from $12.62 a year earlier.

Shipped overseas as LNG, June-quarter gas would have fetched about $20.84 a gigajoule, on the industry's own figures. That gap is the whole fight. Gas is cheaper at home than abroad, before any new law.

On 14 October the Albanese government introduced its Domestic Gas Reservation Bill to Parliament, ESD News reported. It would make LNG exporters supply up to 20% of their exports to Australians.

A Senate committee is now testing it. Critics still see loopholes for Santos, and big gas users want a price promise. So will your bill actually fall?

Probably not by much, and not soon. The rules bite from 2028, wholesale prices sit below last year's, and pipes, not gas, are the biggest cost on a household bill. Confidence: Likely. Three parts to this: today's price, your bill, and the 2028 cliff.

The scheme arrives after a price drop. East coast wholesale gas fell about 15% in a year to the September quarter, on our maths from AEMO's figures. It still sits at roughly half the export price.

Big industrial users set their bar at under $10 a gigajoule. Leigh Clemow, acting chief executive of the Energy Users Association, wrote in September that gas notionally on offer "is not the same as affordable gas being available".

The September quarter, which spans winter, put the price back above that bar. Andrew Richards of the same association told the ABC on 27 October that prices fell from about $13 to about $8.50 once Santos bought less local gas.

The timing matters too. The scheme, as the ministers' release sets out, opens export licence applications on 1 January 2027. The 20% obligation itself only applies from 1 January 2028.

So until 2028, the scheme cannot move your bill at all.

Even a big wholesale fall shrinks on the way to your letterbox. A typical New South Wales household uses 24.4 gigajoules a year, according to the pricing regulator IPART. On Sydney's main gas network, the median market offer cost about $1,195 a year in mid-2024.

Distribution, meaning the local pipes under your street, makes up just over a third of the median bill and is its largest part, IPART found. Those costs rose 14% in a year while wholesale costs fell.

Here is the maths. Every $1 cut to the wholesale price saves that household about $24 a year, or 2% of the bill. The $1.85 drop of the past year is worth about $45, if retailers pass all of it on.

Electricity is the bigger lever, because gas plants often set the power price when the wind drops. Yet AEMO says gas generation fell 34% in a year to the September quarter, which loosens that link.

The scheme's job is insurance. AEMO's 2026 gas outlook says output from old southern fields will fall 46% over five years, with supply gaps from 2030 without new investment.

Without a rule, exporters could chase the higher overseas price just as local supply runs short. Queensland's LNG producers control 84% of the east coast's commercially viable gas, the ACCC found in July.

The fine print decides whether the insurance pays out. In October, Paul Farrow, national secretary of the Australian Workers' Union, warned of "Santos-sized loopholes", the ABC reported. He later told the ABC that ministers keep near-unlimited power to vary an exporter's duty.

The bill honours Santos's GLNG export deal with Korea only until 2031, Josh Runciman of the Institute for Energy Economics and Financial Analysis (IEEFA) told ESD News. His 29 October submission warns the bill still ignores exporters buying up local gas fields.

The gas industry argues the scheme could backfire. "Our central concern remains the must-sell requirement," Samantha McCulloch, chief executive of Australian Energy Producers, told the ABC. Forced sales could scare off investment, leaving less gas, and higher prices, later.

Shell Australia chair Cecile Wake warns prices could fall "below the long-run marginal cost of bringing new production out". Nationals leader Matt Canavan says about 35% of eastern gas already goes to locals, he told AAP.

Others say 20% is simply too big. Tony Woods of the Grattan Institute told the Senate hearing that 2% to 5% of local demand would suit better, Michael West Media reported. Greens senator Steph Hodgins-May called the scheme a distraction from taxing gas.

They are right that rules alone don't drill wells. Western Australia has long made exporters reserve 15% of their gas, yet evidence to a 2023 WA inquiry put new contract prices above $12 a gigajoule, IEEFA notes. Israel's 2021 export cap, Bloomberg reported, also guarded supply rather than price.

Yet the industry's own argument cuts both ways. If oversupply could push prices down hard enough to deter drilling, the scheme does have teeth.

Nobody has published modelling of what the scheme does to prices. Resources Minister Madeleine King promises "significant downwards pressure" but gives no figure. The verdict assumes the minister keeps the 20% largely intact and that global LNG prices stay above local ones.

The gas reservation plan won't shrink your bill much, but it could stop a nasty jump from 2028 if Parliament closes the loopholes. Confidence: Likely. Manufacturers and gas-heavy households in Victoria gain most from a protected supply; exporters with spare cargoes, Santos first, lose most.

This piece draws on 21 sources: market operator and regulator data (AEMO, ACCC, IPART), a ministerial release, the exposure bills via law firm summaries, submissions from users, analysts, industry groups and producers, and news reporting from the ABC, AAP, ESD News, Michael West Media, The Nightly and Bloomberg. We could not find published modelling of the scheme's price effect, a current national figure for the wholesale share of gas bills, or the Senate committee's reporting date. The 15% fall, the $24 and $45 savings and the 2% share are our arithmetic from AEMO and IPART figures. Researched with AI tools; checked and edited by VOID.

Australia wants gas exporters to sell up to a fifth of their gas at home from 2028, and the bill is now before Parliament. Wholesale gas is already about 15% cheaper than a year ago, and pipes cost you more than the gas itself, so don't expect a big saving. The plan matters more as insurance against a price jump when old southern gas fields run down, and that depends on Parliament closing the loopholes.