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BlueScope Steel chief executive Mark Vassella has urged the Australian government to take immediate action to fix what he calls the country’s “broken” east coast gas market, warning that failure to act could push Australia toward the same industrial decline seen in the United Kingdom.
Delivering a speech at the National Press Club, Mr Vassella said the Future Made in Australia policy would fail unless manufacturers were guaranteed access to affordable gas. He described the current situation as “a dangerous crossroads for Australian manufacturing.”
“Major change is required to fix our broken gas market and reinstate a fair domestic price,” Vassella said. “If we can’t, we face a decline similar to the UK steel industry.”
⚙️ Industry Calls for Reform
Vassella and other major manufacturers are demanding a domestic gas reservation policy and a price cap of $10 per gigajoule, arguing that a third of east coast gas production could easily meet domestic needs while maintaining exports.
Despite abundant reserves, Australia has some of the highest wholesale gas prices in the world, largely because local prices are tied to liquefied natural gas (LNG) export markets.
Manufacturing Australia — which includes BlueScope Steel — says recent federal interventions, including a $12-a-gigajoule gas cap, have failed to deliver relief. Chief executive Ben Eade described the cap as “effectively a floor”, noting that some companies are now offered contracts at $20 per gigajoule.
📉 Mounting Economic Pressure
Manufacturers argue that soaring gas costs have already driven the closure of major plants, including Qenos, Oceania Glass, and Incitec Pivot’s Gibson Island facility.
Capral Aluminium CEO Tony Dragicevich said energy costs have tripled in five years, forcing local firms to import glass and other materials once made domestically.
“It’s a crying shame that an industry that had been around for nearly a century has shut down,” Dragicevich said. “Gas used to be $5 a gigajoule; now it’s around $15.”
⚖️ Policy Debate Intensifies
Industry leaders say the solution lies in a national gas reservation scheme, similar to Western Australia’s successful policy that ensures local supply before exports.
However, analysts such as Joshua Runciman of the Institute for Energy Economics and Financial Analysis (IEEFA) caution that simply adding new supply won’t lower prices — arguing the real issue lies in export-linked pricing and market control.
Vassella ended his address with a stark warning for the government:
“A future made in Australia depends on affordable gas being made available for Australian industry. No gas, no future made in Australia.”
