Analyzing Demand & Supply Dynamics in the Australian Market: An Essay

This essay delves into two significant economic issues within the Australian market: the escalating prices of natural gas and the rising energy costs impacting heavy industries. The analysis connects these issues to the fundamental principles of supply and demand, exploring the influence of factors such as international LNG market linkages, government policies, and market dynamics. The essay investigates the reasons behind gas price increases over the past decade, including wholesale costs, network charges, and retail margins, and examines the impact on both households and businesses. Furthermore, it explores the consequences of rising energy costs for energy-intensive industries, including reduced competitiveness and the need for energy efficiency improvements. The essay applies economic theories like supply and demand, and the specialisation of commodity concept to explain the observed trends and their implications for the Australian economy.