Submission: Select Committee on the Taxation of Gas Resources

10 April 2026

To: Nicholas Craft
Re: Select Committee on the Taxation of Gas Resources

Dear Committee members,

Thank you for the opportunity for the Institute for Energy Economics and Financial Analysis (IEEFA) to provide input to the Committee’s consideration of taxation of Australia’s gas resources.

IEEFA is an independent energy finance think tank that examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.

IEEFA supports the Committee’s assessment of current tax arrangements for Australia’s gas resources, in part because the Petroleum Resource Rent Tax (PRRT) has delivered low returns to Australians from the extraction of gas resources. 

Our analysis shows that PRRT per gigajoule of gas extraction is well below equivalent royalties in Queensland. In recent years, Queensland’s gas royalties have been larger in absolute terms than PRRT revenues despite Queensland gas production making up a relatively small share of Australia’s total production. That said, Queensland’s gas royalty revenue is relatively low compared with that from coal. At a national level, royalties as a share of export earnings are much higher for coal than for gas, indicating the potential for reform to increase gas royalty revenues. 

IEEFA’s recent assessment of possible taxation options is outlined in this submission. Key findings are:

• A tax on LNG exports amid surging global prices and the prospect of windfall profits could help fund cost-relief and fuel-shifting measures to protect Australian consumers exposed to rising oil prices.
• Surging LNG prices following Russia’s invasion of Ukraine delivered windfall profits for LNG exporters from FY2021-22 to FY2023-24, but PRRT revenues per gigajoule of gas extraction increased by only a small amount.
• Several tax reform options could ensure a range of improved outcomes, particularly during windfall periods, with price-based royalties and a flat tax on revenues the most promising models.

Kind regards,

Josh Runciman, Lead Analyst, Australian Gas