Electricity and gas networks to be probed for alleged $400 million price gouging

The Federal Government has ordered the Australian Energy Regulator to probe allegations of $400 million price gouging of electricity and gas customers by electricity and gas networks to pay their corporate tax bills.

Federal Energy Minister Josh Frydenberg said that tax office analysis between 2013 and 2016 found a discrepancy between the tax allowances set by the Australian Energy Regulator and the amount they actually paid.

Frydenberg says price gouging is unacceptable

Mr Frydenberg said that networks are suspected of price gouging by as much as $400 million every year in the period under review.

He said: “It is totally unacceptable for consumers to be charged for corporate tax liabilities that are not actually incurred,” Frydenberg said on Tuesday. “The Turnbull government wants to ensure consumers are paying no more for their energy than they have to.”

Speaking on 3AW radio, Prime Minister Malcolm Turnbull said he was not sure when and how the estimated $400 million could be recovered, but added that the issue was being investigated.

“If they are charging for costs they don’t have, they may well be obliged to pay compensation,” he said.

Bill Shorten demands refunds for price gouging

Opposition leader Bill Shorten charged into the argument and said that every extra cent charged should be refunded to customers.

“This arrogant behaviour of large corporations treating consumers as mushrooms and keeping them in the dark, this has to stop,” he said.

“No more cups of teas with the big energy companies – action now. Action speaks louder than words,” he said.

Government will act on findings of price gouging inquiry

The treasurer, Scott Morrison, said the government will act on the inquiry’s recommendations into the price gouging allegations.

“They can’t be taking customers for a ride on these things. I would hope that is not the case. But we wouldn’t be initiating this investigation if we weren’t concerned.”

An initial report from the regulator is expected mid-year, with a final report to go to COAG energy ministers by December.

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