The uncomfortable truth that every Aussie should know as energy prices hit record highs
Japanese energy firms could be making upwards of $1 billion on-selling Australian liquefied natural gas to other countries at a time when domestic shortfalls loom.
Australia is the top supplier to Japan 's third-party trade business, a new analysis suggests, making up roughly 40 per cent of cargos with an estimated 600-800 petajoules onsold via the intermediary.
The findings from the Institute for Energy Economics and Financial Analysis follow repeat warnings of domestic gas shortages as well as several interventions into Australian energy policy debate by Japanese figures.
In 2023, Japanese ambassador to Australia, Yamagami Shingo, warned the 'neon lights of Tokyo' could go out if Australia stopped producing energy resources, including gas.
IEEFA Australia chief executive Amandine Denis-Ryan said it was 'quite extraordinary' for Australia to be running out of gas for domestic use - and considering importing it - while Japan resells 'enormous volumes of our gas overseas for a profit'.
The energy analysts drew on shiptracking and contracts data to understand how much Australian LNG was being resold via Japan.
The upwards of 600PJ estimated annually surpasses the 511 PJ used by eastern Australian markets last year.
Resales from both eastern and western Australia also eclipsed projected annual gas shortfalls in those regions.
In addition, emerging nations were not the top customers of repackaged Australian LNG.
Two-thirds of on-sold Australian product was going to Taiwan and South Korea.
'This should be concerning for Australian producers, for whom these are premium markets with high purchasing power and low credit risk,' Ms Denis-Ryan said.
In her view, the findings supported the case for putting aside more gas for local use through domestic reservation.
'Energy exports are currently hurting Australian consumers and the Australian economy,' she told AAP.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Guardian
an hour ago
- The Guardian
Albanese staunch on under-16s social media ban and defence spending as possible Trump meeting looms
Anthony Albanese has pledged not to back down on plans to ban under-16s from social media and force online giants to pay for Australian news – two key policies opposed by big tech companies with the ear of Donald Trump – ahead of his expected meeting with the US president next week. The prime minister also declared that 'Australia should decide what we spend on Australia's defence', shrugging off demands from the Trump administration to rapidly increase military spending, even as he kept open the option of budgeting more for new assets. In a Tuesday speech setting out his second-term agenda, Albanese repeatedly pushed back on concerns raised by the US over Australian policy positions. The prime minister said the 3 May election – which delivered Labor a thumping majority – was an endorsement of 'a progressive patriotism where we are proud to do things our own way', adding that Australians had voted against 'importing ideologies' and 'policies copied from overseas'. Sign up for Guardian Australia's breaking news email 'We certainly support the news bargaining code, and we've made it very clear, for example to the US, and we made it clear publicly, that that is not on the table [for negotiating] any more than the social media ban for under-16s is,' Albanese told the National Press Club. 'We respect the role of particularly local papers, as a local here in Canberra. It plays a vital role, and it is of critical importance that those media organisations are able to survive.' The government outlined its plans for a news media bargaining incentive in December, after outlets flagged that existing deals were expiring and might not be renegotiated. It updates the existing code, after concerns that tech giants were sidestepping mechanism would require large online platforms – including Google, Meta's Facebook and Instagram, and Bytedance's TikTok – to pay a fixed charge or enter direct deals with Australian media outlets to recognise the value of news content on those platforms. The new plan was met with strong opposition by social media platforms, who urged the Trump administration to target 'coercive and discriminatory' Australian media laws. The Australian government has not spoken much about the incentive recently, raising fears it would be watered down. But on Tuesday, Albanese said the government remained committed to the policy, and the under-16s ban. 'This is about government creating a community standard, as well as a legal one. Making it clear that social media companies have a social responsibility … This matters, and we won't be taking a backward step on it,.' Noted the changing media landscape, the prime minister said: 'Legacy media isn't everything, but it is important.' Albanese travels to Canada for the G7 meeting this week, and may meet Trump during that trip, but a meeting has not yet been locked in. Australia has meanwhile been pushing for exemptions to US tariffs, with the trade minister, Don Farrell, conceding this weekend that the final decision on any exemptions would be made by Trump himself. Asked about his potential meeting with Trump, and what a trade deal could include, Albanese said he would 'only sign up to things that are in Australia's national interest'. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion 'Things like the Pharmaceutical Benefits Scheme, the media bargaining code, our biosecurity in agriculture – they're not on the table as far as we're concerned,' he said. 'But are there areas in which Australia and the United States can have win-wins? Yes, I believe that there are.' The US secretary of defense, Pete Hegseth, met Australia's defence minister, Richard Marles last weekend in Singapore. Hegseth said Australia should increase its defence spending to 3.5% of GDP 'as soon as possible', a figure Albanese and other senior Labor members have downplayed, saying Australia does not set such arbitrary spending targets for any other area of government. The prime minister repeated that position on Tuesday, though did not rule out raising defence spending if needed. 'There is no reason why defence should be governed by anything other than one factor: what do we need? What is the capability we need to keep us safe … Of course, we'll always provide for capability that's needed,' Albanese said. 'I think that Australia should decide what we spend on Australia's defence … Arbitrary figures lead to a cul-de-sac, and we want to make sure as well that every single dollar that defence spends results in actual assets.'
Reuters
an hour ago
- Reuters
Chinese state media calls for crackdown on 'zero-mileage used cars'
BEIJING, June 10 (Reuters) - The Chinese practice of selling brand new cars as heavily discounted second-hand vehicles to get rid of inventory should be ended, the official newspaper of the country's governing Communist Party said in an article published on Thursday. The People's Daily, which often signals the positions of China's top Party leaders on a variety of issues, called for a crackdown on the practice, also known as zero-mileage used cars, just weeks after Great Wall Motor's ( opens new tab Chairman Wei Jianjun publicly condemned it and China's commerce ministry met with Chinese automakers to discuss it. While China's Commerce Ministry did not make public its position, the People's Daily struck a harsh tone, calling out the inflation of sales data motivating Chinese carmakers and urging "tough regulatory action" to restore market order. "This disguised form of price cutting disrupts normal market order and is a striking example of the auto industry's 'involution'," the People's Daily said, using a term popular in China that describes a race to the bottom driven by excessive competition. "Once market competition rules are properly enforced, 'zero-mileage used cars' won't be able to run far — or for long." China is experiencing growing deflationary pressures as U.S. tariffs add to the gloomy mood in the world's No.2 economy. Companies in sectors from fast food to high fashion have been cutting prices amid concerns about oversupply and sluggish household demand. Price wars have gripped the Chinese auto industry in recent years, partly driven by slumping domestic consumption and overcapacity that has left many struggling to meet sales targets. While the sale of zero-mileage used cars is seen by many Chinese automakers as an effective way of clearing out an ever-growing inventory of unsold cars, with domestic and overseas consumers lured by deep discounts on what are still brand new cars, the state-run newspaper listed a litany of negative effects caused by the practice. "For manufacturers, this sales tactic may help reduce inventory in the short term but compresses profit margins, increases losses, and hinders investment in product quality and innovation — ultimately harming sustainable development," the article said. "For consumers, what seems like a good deal in terms of price comes with hidden risks: the loss of first-owner benefits, potential battery degradation, and steeper depreciation when reselling," it continued, adding the practice undermines fair competition, distorts market data, and disrupts both new and used car markets. The People's Daily singled out manufacturers of electric vehicles as needing to move beyond "data worship" and competing on volume, in order to focus on product quality and technological innovation. It did not name any specific automakers. The newspaper also listed measures Chinese regulatory authorities should adopt in order to prevent the sale of zero-mileage used cars, including strengthening oversight of second-hand vehicle registration, establishing a vehicle lifecycle tracking system, and strictly controlling the practice of immediate resale after registration.
Reuters
an hour ago
- Reuters
India's external investment deficit a hurdle for rupee as Asia rides weak dollar's coattails
MUMBAI, June 10 (Reuters) - The rupee is likely to lag most of its Asian peers in a softer dollar environment, analysts say, with the Indian currency weighed down by an imbalance between what the country owes and owns abroad. While currencies such as the Singapore dollar, Korean won and Taiwan dollar have surged 6% to 9.5% this year, the rupee is nearly flat. Analysts at Barclays, Jefferies, and ANZ attribute the divergence to differences in the net international investment positions (NIIP) with Asian economies. NIIP is the gap between what a country owns overseas and what it owes to the rest of the world. As of December 2024, India had a negative NIIP, owing about $350 billion more to the world than it owned in foreign assets. In contrast, most other Asian countries hold a positive NIIP, meaning their ownership of foreign assets exceeds their external liabilities. Unlike Taiwan, South Korea, China and Hong Kong, the absence of a positive NIIP for India implies underperformance of the rupee, said Mitul Kotecha, head of FX and EM macro strategy, Asia, at Barclays. A positive NIIP usually stems from consistent trade surpluses, with excess earnings often invested in U.S. assets. When the dollar softens, the value of those assets drops. To protect against that, investors hedge by selling dollars and buying their own currencies, which tends to boost the local units. According to Barclays, Singapore, Taiwan and China and Korea hold the most liquid net international assets in Asia, while India and Indonesia hold the least. India's international investment position implies that the rupee "may lag the rest of Asia," said Brad Bechtel, head of global FX at Jefferies. "It's not like a very negative story. It's just more of a lagging story," Bechtel said. The NIIP positions of Asian countries have come into focus amid investors seeking safety due to a persistently weaker dollar. Analysts and option markets concur that the dollar hasn't likely bottomed yet. Minutes of the Federal Reserve's May meeting cited a rise in hedging demand as one of the factors contributing to the dollar's decline. International investment surpluses in many Asian markets could boost their respective currencies, per analysts at BMI, a Fitch group company. "This would come as overseas capital is repatriated or as firms move to hedge previously unhedged FX exposure," the firm said in a recent note, pointing to the sharp appreciation in the Taiwanese dollar as an example.
