The Australian Competition and Consumer Commission welcomes the issue of the final report of the Productivity Commission's review of the gas access regime.
"The Productivity Commission has found that the original arguments for a gas industry-specific regime are still valid and are likely to remain so for some time", ACCC Chairman, Mr Graeme Samuel, said today.
"The final report recommends retention of a gas-specific regime, with the addition of a price monitoring option".
Under the current regime, substantial progress has been made in achieving the government's aims for the gas industry.
The report observes that Australia has seen developing competition in upstream and downstream markets, lower gas transport charges, significant pipeline investment and efficiency gains for the broader economy. Moreover, the gas market is maturing and the construction of new pipelines that have assisted basin on basin competition is occurring.
In view of the changing nature of the gas market the report has recommended a number of adjustments to the current regime.
"By and large, the ACCC welcomes and supports the recommendations set out in the report. Many of the recommendations will streamline the functioning of the current regime resulting in lower administration and compliance costs.
"The report has accepted a number of the ACCC's suggestions including clarification of the status of pipeline expansions, removal of one step in the decision making process and adjustment of the merits review process.
"One of the key recommendations in the report is the introduction of a second tier of regulation that is less intrusive than the current approach of setting reference tariffs. In the right circumstances, a carefully designed second tier of regulation offers benefits.
"However, it is critical that the second tier still provides effective regulatory oversight because pipelines are only regulated if they have the capacity to exercise market power. If the second tier is ineffective then pipeline companies would be able to take advantage of their market power to the detriment of gas users and the broader economy".