Homes and businesses on the east coast are facing the threat of gas shortfalls from 2024, prompting the competition watchdog to warn the nation’s liquefied-gas exporters are failing to live up to a promise they would maintain sufficient local supply.

While the market was likely to have enough supply this year, the Australian Competition and Consumer Commission (ACCC) describes the outlook as “finely balanced” and forecasts shortages in southern states within two years that could hike costs for households with gas heaters and intensify pressure on gas-reliant manufacturers already struggling to remain viable.

The longer-term outlook was “even more concerning”, said ACCC commissioner Anna Brakey, as gas shortages threatened to spread across the whole east coast market by 2026.

“Commercial and industrial users are feeling the impact of this,” she told the Australian Domestic Gas Outlook conference on Tuesday. “They have told us they are receiving limited offers.”

In her speech, Ms Brakey took aim at Australia’s large producers of liquefied natural gas (LNG), saying the industry has been delivering less gas into the domestic market over the past five years.

“It’s this rapid and significant reduction in domestic supply from LNG producers that is contributing to the tight and uncertain conditions in our domestic market, and, to be clear, this is at odds with what the government was told before the LNG projects were developed,” she said.

“Gas companies assured governments that there would be sufficient supply and domestic gas prices wouldn’t go up, but it hasn’t turned out that way.”

The prospect of a looming gas shortage has been intensifying concerns among manufacturers already struggling to absorb higher-priced gas supply contracts. Last year, fertiliser manufacturer Incitec Pivot openly blamed gas prices when it announced it would shut down its 50-year-old Gibson Island plant in Brisbane.

Representatives for Australia’s gas industry on Tuesday said the domestic market was adequately supplied. “In terms of current supply, the ACCC itself has confirmed on 11 consecutive occasions that there’s no shortfall,” said Andrew McConville of the Australian Petroleum Production and Exploration Association. “Australian gas is flowing to Australian customers – with more than one new gas supply agreement per month for the past nine years – and international gas prices are currently at up to 80 per cent higher than domestic prices.”