One thing we can expect to crop up again today – and until the opposition leader explains it – is how are households going to get cheaper gas under the Liberal Party’s gas reservation policy.

Peter Dutton is right – more gas for domestic use should bring down prices. He is also right – Australia does not have a gas shortage. And while we he seems a little bit reticent to say it again, he clearly said on Saturday when announcing the gas reservation policy that we don’t actually need more gas to have a gas reservation scheme. Here’s the quote – put it on a bumper sticker!

We can do it straight away because the gas is there, it’s being produced now. It doesn’t require any infrastructure. It is a matter of turning it back into the economy.”

So ok, we don’t have a gas shortage. But the problem is while Woodside and Santos and INPEX might be the ones extracting all the gas we poor folk living in homes in Australia don’t buy our gas from them, we buy it from retailers – mostly three of them – AGL, Origin and EnergyAustralia.  

And when you have an industry dominated by 2 or 3 retailers… well they get to make a lot of profit at our expense.

It is easyish to mode the wholesale price of gas – ie the price those big three pay to get gas from Santos, etc, but it is tougher to do it for the retail sector.

Modelling consumer prices means somehow modelling what these three retailers charge their consumers. And those big three can pretty much do what they want without much logic on the surface.

For example, AGL has been charging consumers three times the price for its large business customers and the others are not far behind. Are they going to change that? They could for example just raise the price they charge businesses and leave household gas at the same price. How will a govt under Peter Dutton get AGL, Origin and EnergyAustralia to actually pass on the lower wholesale costs to their customers? 

When you look at what AGL charges – the big chunk is not the cost of their gas (energy procurement costs) but retail profit! Anyone think they are about to give that up?

Journalists love to call for modelling. But always remember – modelling of anything generally delivers what the people who commissioned the modelling wanted it to say (think the modelling for the Liberal Party’s nuclear power fantasy).

So good luck for anyone who thinks they can model any reactions from AGL, Origin and EnergyAustralia, and also if or when it does come up, let’s hope journalists don’t swallow it in one gulp.