Shell plc has cautioned Australia against imposing a windfall tax on liquefied natural gas (LNG) exporters, warning the move could discourage investment and weaken energy security as global gas prices surge following disruptions linked to the Iran conflict.
Australia, the world’s second-largest LNG exporter, has seen demand rise after Iranian strikes forced Qatar to halt production, tightening global supply.
The government is reportedly exploring ways to benefit from the price surge, with Prime Minister Anthony Albanese asking the Treasury to assess a potential new tax on LNG exports and review the country’s Petroleum Resources Rent Tax (PRRT).
Cecile Wake, chair of Shell Australia, said policymakers should avoid short-term responses to the energy crisis, warning that abrupt policy changes risk undermining stable investment conditions in the sector.
She said proposed measures could reduce the value of existing projects and make future developments less competitive compared with alternatives in other countries.
LNG prices in Asia have jumped to three-year highs since the conflict began in February, with profits from long-term contracts many linked to oil prices also expected to rise in the coming months.
Australia exported about A$65 billion ($44.5 billion) worth of LNG last year, but producers have faced criticism for paying relatively low taxes under rules allowing them to recover large construction costs before paying the PRRT.