Gas companies argue that a 25% gas export tax would threaten Japan’s energy supply - this is nonsense.
Fri 24 Apr 2026 13.30 AEST
Photo: AAP Image/Joel Carrett
A 25% tax on gas exports could raise up to $17 billion per year and bring down the cost of gas for Australian families and businesses.
Australia’s gas companies are scared of this popular proposal, and have been spouting all sorts of spurious arguments for why they shouldn’t pay more tax.
One you might have heard is that Australia’s gas is needed to ‘keep the lights on in Japan’ and that additional taxes will somehow stop this.
This is nonsense.
While Japan does use gas to generate some of their electricity, in recent years, they have bought far more than they need and have started on-selling this gas to other countries.
According to research from the Institute for Energy Economics and Financial Analysis (IEEFA) in 2024 Japanese companies on-sold more gas than the total gas demand for Eastern Australia, and likely made more than A$1 billion in profits from this on-selling.
Recent research from IEEFA shows that this has only accelerated. In the fiscal year 2024, Japan resold an incredible amount of liquefied natural gas (LNG): despite having no significant gas reserves of its own, Japan resold more LNG than is produced in Russia, the world’s fourth-largest LNG exporter, and 1.7 times as much LNG as they directly imported from Australia.
Comparing this to Australia’s gas use shows that Japan resold more than twice as much gas as Australians used for generating electricity, household heating and cooking, and industrial uses such as steelmaking.
How has this happened?
Further research from IEEFA shows that Japanese domestic demand for gas has fallen dramatically, as restarted nuclear reactors and deployment of renewables have displaced gas-fired generation.
Instead, Japanese LNG buyers are now cultivating demand for gas in nearby markets such as South Korea and Taiwan and profiting while doing so. Indeed, the Japanese Government is actively encouraging LNG buyers to continue to buy large volumes of LNG and on-sell them.
A gas export tax won’t hurt importing countries
It’s important to remember that a gas export tax will not increase the price of Australian gas exports for other countries. Commodities like gas, oil and coal are not like manufactured products. Gas is sold into a world market at the world price.
No one in the world pays a ‘premium’ for Norwegian gas because the Norwegians impose a 78% tax, and Australian gas does not currently sell at a discount on world markets because we have been giving our gas away for free.
The gas export tax will be paid by the gas company and merely reduces their profits and dividends they pay to their (mostly foreign) shareholders.
This will upset multinational gas companies and their owners, but won’t impact the prices paid by importers.
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