Gas supply 'evil price gouging'

Gas supply 'evil price gouging'

Thu July 5, 2012 8:26pm

"It's $23 a tonne now. (But) under the government's own figures it will be $37 a tonne in 2020 and, would you believe it, $350 a tonne in 2050."

Mr Abbott also seized on reports Labor was considering scrapping the $15-a-tonne floor price that is scheduled to underpin the shift to an emissions trading scheme in mid-2015.

The government was creating "complete chaos and confusion", he said.

"We are consulting on the floor price. There's nothing new in that," Prime Minister Julia Gillard told reporters in Melbourne.

The yet-to-be-regulated floor price will rise by four per cent a year until 2018 when the market will set the cost of permits unconstrained.

It's meant to ensure there's no shock when the fixed-price period ends in mid-2015 with permits costing $25.

The government has consulted with industry about how to implement the floor if the cost of international permits is lower than $15.

A top-up mechanism is likely to be charged to make domestic and international units effectively the same price. European permits are currently $10 a tonne.

Greens leader Christine Milne insists the government isn't walking away from a floor price.

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