Taxation and Pricing of Natural Gas: The Dutch Transition to Gas Market Hub Pricing and Lessons for Australia’s Integrated Gas Projects
University of New South Wales Law Journal, 43(1): 1-43, 2020
Posted: 12 Mar 2020
Date Written: February 13, 2020
The Australian government receives poor revenue returns from the Petroleum Resource Rent Tax (‘PRRT’), a tax regime that applies to integrated offshore, gas projects. By contrast the Netherlands has captured significant tax revenues from gas. We ask whether Australian government PRRT revenue would increase from an alternative method of gas pricing (known as the gas transfer price) by modelling four large gas projects. The Dutch case explains their gas market evolution and how high revenues have been maintained. We find that Australia’s current PRRT regulated pricing method for integrated gas projects is problematic and change is needed. The Dutch case study contextualises the discussion of an alternative gas transfer pricing method for offshore gas projects in Australia. The energy justice framework is used for analysis. This article contributes to the current government review of the PRRT regulations on the gas transfer pricing method.
Keywords: fiscal policy, regulations, petroleum resource rent tax, tax review, gas
JEL Classification: K34
Suggested Citation: Suggested Citation