Orica is a real time case study in the problems Ian Verrender canvassed in his analysis on the gas market, posted by Dan below.
The company's chief executive Sanjeev Gandhi says Australian gas contracts are more than three times more expensive than in North America, making local gas-intensive industries uncompetitive.
"Those exemptions have, unfortunately, turned a $12 [price] cap into a $12 floor today, so nobody is willing to make offers below $12," he told Alicia Barry on The Business.
"We, at Orica at our Yarwun site in Queensland, just signed a contract for $12. Now, to put it in perspective, I have manufacturing in North America where I can get an equivalent of less than $4 gas — so $12 already is more than three times more expensive than what I can source elsewhere in the world.
"And if that gas price cap is not fully implemented, for example to the retailers, who are distributing the gas into the pipelines, then we have a real problem and that is what we're facing today."
You can watch Mr Gandhi's interview with Alicia Barry on The Business website.