(Bloomberg) --

Australian Energy Minister Chris Bowen said he doesn’t expect every coal and gas company will welcome price caps but it is a necessary intervention in the national interest to protect consumers from elevated “war” prices.

Prime Minister Anthony Albanese announced the cap on domestic energy prices Friday in a package aiming to ease cost-of-living pressures caused by soaring global commodity prices. The moves could kill investment confidence and reduce future supply, the Australian Petroleum Production & Exploration Association said in response.

Bowen rejected that argument, saying gas was trading last year at the same level as the proposed cap price and businesses were still investing.

“The idea that you need somehow elevated war profits to make investments work, I reject that,”  Bowen told reporters Saturday in Sydney. He said companies need to “be a bit reasonable about the profits you want to make from the Australian people.”

The center-left Labor government’s budget in October revealed energy prices are forecast to surge in coming months, as higher global commodity costs are reflected domestically, and also make electricity generation more expensive.

“We were facing gas price rises next year of 36%, that’s not acceptable,” Bowen said. “Either you intervene and take the sting out of those price rises, or you don’t. We believe in intervening.”

The price increases don’t apply to new gas installations, or on exports so if companies “want to make money from exports, thats okay,” he said. 

“But we insist on capping prices for Australians. Its Australian gas, under Australian soil and Australians should not be paying elevated war prices for that gas.”

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