Watchdog head says price cap won't push up gas prices

Australian Competition and Consumer Commission chair Gina Cass-Gottlieb rebuked the assertion by energy giants that the government-imposed cap would kneecap providers and inflate costs for consumers.

Ms Cass-Gottlieb said the cap did not apply to new supply.

"The emergency price cap, we have substantial data that it both covers costs and reasonable return on costs in relation to existing supply," she told the National Press Club on Wednesday.

The ACCC is also continuing to consult on a mandatory industry-wide code to ensure investment in new gas supplies.

"An express policy objective that is stated in that consultation is that the reasonable pricing framework and the process under the code is to be consistent with incentives to invest in new supply," Ms Cass-Gottlieb said.

"The ACCC reports have shown the importance, even in a transitioning economy, for bringing new supply on in the east coast of Australia."

Assistant Energy Minister Jenny McAllister said the gas cap imposed before Christmas had been successful in mitigating the worst of energy price hikes.

"All of the advice we've received is they have been effective in taking the sting out of the tail of some of the price increases that were projected and now are not going to materialise in quite the same way," she told ABC TV.

But Nationals leader David Littleproud said Australia was drawing down on domestic gas supply every day because the government had taken away market confidence.

He said $1 billion of investment in Senex that would have put 120 petajoules, or 10 per cent of the east coast market, into the system had been pulled.

"They've taken away the investment confidence in increasing gas supply," he told Sky News.

The watchdog is reviewing the wholesale gas market to ensure adequate supplies at reasonable prices for Australia's east coast.

Australian Associated Press