25/06/2008 - 22:00

Gas allocations a business concern

25/06/2008 - 22:00

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The battle for gas allocation in the wake of the Varanus Island incident has become hotter as industry starts to grapple with the longevity of the crisis, which is expected to continue in some form until December.

The battle for gas allocation in the wake of the Varanus Island incident has become hotter as industry starts to grapple with the longevity of the crisis, which is expected to continue in some form until December.

In forecasting losses from the crisis would reach billions of dollars, the Chamber of Commerce and Industry put significant focus on households to consume less energy, but did not go as far as suggesting there should be mandatory cuts in retail consumption.

Businesses that discussed the issue with WA Business News were not certain that households needed to be rationed and were more concerned that allocations appeared to be haphazard and unfair.

Kemerton pigment manufacturer Cristal Global is one business affected by the crisis, receiving about 15 per cent of its gas requirement, much of which is used simply to keep the machinery operating so it won't get damaged in a shutdown.

Cristal director of operations Asia Pacific, Dominic Manganaro, said his key issue was looking after his 380 staff, employing them on maintenance, providing training and encouraging holidays while the company's operations idled.

Mr Manganaro said he had a two-fold concern about the transparency of gas allocations - firstly that business didn't know what was becoming available and, secondly, that there was no mechanism for freed-up gas to be traded.

"It has not been fair and open in the sense that the market hasn't had full access to the gas that has been made available," he said.

"You have to have access and you need a mechanism for companies to access gas that becomes available.

"It really is haphazard and inconsistent."

Mr Manganaro added that he was concerned about the impact on the local community from which Cristal bought goods and services, to the value of $2.5 million per week when its operations were running properly.

"There will be a ripple effect through the community," he said.

Belmont-based Prime Laundry and Drycleaning general manager Robert Dube said he could operate on less gas for the foreseeable future if there was an assured and steady supply.

Instead, Mr Dube said gas was coming irregularly and with little notice to allow his business to operate anywhere near full efficiency.

"Every Alinta customer should be asked to cut down by 30 per cent," he said.

"All we are asking for is a daily allocation so we know we can plan."

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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