The Australian Energy Producers (AEP), which represents the country’s oil and gas exploration and production industry He noted that the findings of a recent report reinforce the benefits of Australia’s current fiscal framework, including the Petroleum Resource Rent Tax (PRRT), as the rise in oil prices has the potential to boost federal and state budgets by $17 billion annually.
Based on new Independent analysis By Wood Mackenzie Australia’s oil and gas industry is expected to provide approximately $160 billion in taxes and royalties to governments over the next five years if high international prices persist under current tax settings, representing about $80 billion more than typical long-term price assumptions, equivalent to approximately $17 billion annually in additional revenue flowing into federal and state budgets.
Samantha McCullochThe CEO of Australian Energy Producers commented: “Australia’s oil and gas financial system is designed to deliver strong returns to society, and this analysis shows it does just that, especially when prices are high.”. As global energy markets tighten and commodity prices increase, the benefits flow directly to Australian governments through increased corporate taxes, royalties and PRRT receipts.
“The analysis shows that the Regional Reconstruction Fund would achieve the largest increase in tax revenues, with a 70 percent increase in oil prices, nearly tripling revenues from $13.5 billion to $38.9 billion over five years.”
According to Australian Energy Producers, the analysis compares a sustainable oil price of around $120 per barrel with a typical long-term assumption of $70 per barrel, showing government revenues increasing as commodity prices rise.
McCulloch added: “The Australian oil and gas industry contributes significantly to government revenues, while continuing to provide reliable energy at home and supporting energy security throughout our region.
“Domestic gas prices remain stable and well below international levels, and our LNG exports help secure biofuel supply chains to Australia from key regional partners.”
The CEO of Australian Energy Producers notes that the report’s findings come at a time when turmoil in the global energy market has underscored the importance of the country’s oil and gas industry to domestic supplies and regional energy security.
McCulloch highlighted: “Assertions that the industry is not paying its fair share, or that the tax system is not responsive to rising prices, are patently false. In turn, higher taxes would make Australia uninvestable in new oil and gas projects, putting future energy security at risk“.
From the perspective of Australian energy producers, the Australian oil and gas industry is already the country’s second-largest corporate taxpayer, contributing $21.9 billion in taxes and royalties in the last financial year.
Boost your brand with marine energy ⤵️
Steal the spotlight and establish your brand in the heart of the outside world!
Join us to make a greater impact and grow your presence at the core of the marine energy community!
