Gas price cap places pressure on retailers

The consumer watchdog is closely monitoring the behaviour of gas producers amid concerns the government's new price cap is disrupting supply talks with retailers.

Some gas retailers have stopped accepting new industrial and commercial customers, and are letting expiring contracts fall onto expensive default tariffs, as they have not been able to secure supplies from producers.

On Monday, energy giant AGL confirmed it has been unable to secure long-term affordable gas supplies suitable for its commercial and industrial customers.

Treasurer Jim Chalmers said he was aware gas retailers were struggling to negotiate new supply contracts with gas suppliers.

"We expect the gas producers to act promptly to implement the temporary price cap," he told reporters in Canberra on Monday.

He said the Australian Competition and Consumer Commission was monitoring the behaviour of gas producers to make sure they were consistent with the price cap obligations and other relevant regulations.

Federal parliament was recalled before Christmas to pass the legislation for the temporary gas price cap following an agreement by the prime minister and state and territory leaders at national cabinet.

The price cap applies to new domestic wholesale gas contracts by producers on the east coast and came into force on December 23.

The ACCC will provide more detail in the coming days about how it expects producers and purchasers to behave under the price cap.

Liberal frontbencher Dan Tehan said intervening in the energy market was always going to have consequences.

He told Sky News the government should go back to the drawing board and deliver a solution that would not restrict supply.

Dr Chalmers said it was too early to say the price cap was not working as intended.

The temporary policy will be reviewed in six months.

The Australian Industry Group said there was no good reason for gas suppliers to hold up negotiations.

Members seeking new gas contracts in December 2022 were told upstream suppliers were not making offers until they understood the price cap.

AI Group chief executive Innes Willox said a pause to take stock of major rapid regulatory changes is understandable.

"However, at some point due caution becomes foot-dragging, and will be seen as game-playing," he told AAP.

Australian Workers Union national secretary Daniel Walton said the government needed to move swiftly on its code of conduct.

The government is consulting on a mandatory code of conduct, which will include a "reasonable pricing" mechanism for relevant domestic wholesale gas contracts with producers.