Australia’s energy backbone: Oil & gas firms set to boost tax revenue with $21.9 billion

October 3, 2025, by Melisa Cavcic

While emphasizing that oil and gas companies are among Australia’s largest corporate taxpayers, Australian Energy Producers (AEP), representing the country’s upstream oil and gas exploration and production industry, has highlighted that the hydrocarbon industry will drive additions to taxes and royalties by pouring $21.9 billion.

Illustration; Source: Australian Energy Producers

After the Australian Taxation Office’s latest corporate tax report outlined that the oil and gas sector was one of Australia’s largest corporate taxpayers, contributing $10.4 billion in company tax in 2023–24, Australian Energy Producers underlined the ATO’s figures showed the country’s oil and gas sector accounted for around 1 in 10 dollars of company tax paid in 2023–24.

Samantha McCulloch, Australian Energy Producers’ Chief Executive, commented: “The ATO’s results are consistent with Australian Energy Producers’ recent member survey that found the sector is forecast to pay $21.9 billion in taxes and royalties to state and federal governments in 2024–25, representing the highest annual tax contribution from the industry to date.

“The results dispel the myth that Australia’s oil and gas sector does not pay its fair share. The fact is that the oil and gas sector is Australia’s second largest corporate taxpayer, which helps pay for essential services and infrastructure for all Australians.”

In addition, the ATO noted that 2023–24 was the third consecutive year that the resources sector, which includes oil and gas, paid more tax than all other sectors combined. With this in mind, McCulloch said the results reinforced the importance of Australia’s oil and gas sector to the nation’s economic prosperity and energy security.

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McCulloch stated: “In addition to the oil and gas industry’s significant tax and royalties contribution, which total approximately $55 billion over the past three years, the sector is a key driver of Australia’s productivity and economic growth, contributing $105 billion a year to the national economy and supporting 215,000 jobs around Australia.”

The Australia Competition and Consumer Commission (ACCC) claims that gas supply on Australia’s east coast is expected to improve in the first quarter of 2026. However, the outlook is said to still depend on how much uncontracted gas LNG producers decide to export.

Anna Brakey, ACCC Commissioner, explained: “The Queensland LNG producers have reported a reduction in contracted LNG exports, and now expect to have 22 PJ of uncontracted gas available in the first quarter of next year. Given ongoing concerns about sufficiency of domestic gas supply, the ACCC will be monitoring whether and how this gas is offered to domestic buyers.

“Despite the improvement, the supply-demand outlook remains tight in the southern states. For the first time, southern gas producers are not expecting to produce surplus gas in the first quarter of the year, when demand is usually at its lowest. This may create challenges for fully replenishing southern gas storage facilities ahead of winter 2026.”

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Based on the ACCC’s latest gas inquiry report, a gas supply surplus of between 2 and 24 petajoules (PJ) for the east coast, depending on what the LNG producers decide to do with their uncontracted gas. While gas suppliers and users have signed more long-term supply deals so far this year for supply in 2026 and 2027, the report found that the total amount of gas secured under these contracts remains below levels seen before 2022, with most of the contracts for only one year.

The data shows that prices offered by gas producers for 2026 supply eased in the first half of 2025, falling by an average of 2% to $13.12 per gigajoule (GJ) compared to the second half of 2024, while prices offered by gas retailers for 2026 supply averaged $14.33/GJ.

“There are limits to what the gas policy measures can achieve on their own if the underlying causes of inadequate supply and ineffective competition are not addressed. In addition, they may also be having some unintended incentive effects and causing inefficiencies in gas supply negotiations,” concluded Brakey.