Malcolm Turnbull is forcing Australia's gas producers to curb local prices

Prime Minister Malcolm Turnbull Photo: Saeed Khan/ AFP/ Getty Images.

Prime minister Malcolm Turnbull is taking on the country’s gas producers as part of his plan to tackle the rising gas prices for Australian consumers due to domestic shortages.

Producers will now operate under tighter restrictions on exports to ensure that Australian consumers and business have an adequate supply.

Turnbull said the new rules will ensure prices were lower and “fairly reflect international export prices”.

“Australians are entitled to have access to the gas they need at prices they can afford,” Turnbull said.

“It is unacceptable for Australia to become the world’s largest exporter of liquefied natural gas, but not have enough domestic supply for Australian households and businesses.”

The announcement by Turnbull comes as part of his sweeping Australia-first policy, which has also influenced change to some of the country’s immigration policies.

In March, he called out state governments for not allowing the development of gas resources and warned the gas companies that they risk their “social licence” if current export patterns kept up.

“I can say that the gas companies, I have no doubt, are very well aware that they operate with the benefit of a social licence from the Australian people and they cannot expect to maintain that, if while billions of dollars of gas are being exported, Australians are left short,” he said.

“It is not acceptable for Australia shortly to become the world’s largest exporter of liquefied natural gas, to not have enough gas for its own families and its own businesses.”

While the gas companies gave guarantees on supply for the domestic market in response to those remarks, it appears it was not enough.

Turnbull said progress that had been made since March was good but until operators met Australian demand, the new legislation is needed.

The new Australian Domestic Gas Security Mechanism will to come into force on July 1.

People have been sounding the alarm on the nation’s gas shortage for years, but up until this point, perhaps didn’t believe it as a serious enough problem to intervene. Read more on that here.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.