According to The Australian Financial Review, lower long-term oil and gas prices – predicted by global majors BP and Shell – should be good news for domestic gas pricing, but major gas suppliers and retailers are still failing to pass on cheaper rates, say big chemicals companies Incitec Pivot and Qenos.
Since oil majors BP and Shell have slashed their forecast long-term price of Brent crude from $US55 and $US60 per barrel respectively down from $US70 or more
But the major gas retailers and producers in Australia are sticking to high prices, offering Incitec Pivot and Qenos long-term gas contracts at between $8-$9 a gigajoule when the spot prices have dwelled around $5 earlier this year.
Jeanne Johns, chief executive officer of Incitec Pivot, said the spot price reductions don't mean much for business as they need long-term contract prices to make investment decisions.
"If the LNG price is going to be low for the next four years, this lower price should inevitably be reflected in more competitively priced long-term contract offers for domestic gas.
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