The Reserve Our Gas submission accused Australia Pacific LNG upstream operator Origin, which has not yet lodged a submission into the Australian Competition and Consumer Commission inquiry, of getting ready to engage in "supplyside profiteering".

"Origin Energy managing director Grant King, talking at the company's recent annual general meeting, stated that: ‘Origin will reduce its call on production from its upstream business and bank contracted gas this year and call for that gas in the following years when it is more valuable'," Reserve Our Gas said.

"The deliberate restriction of current supply, in anticipation of future price increases, has profound implications for those sectors of the economy dependent on a gas as an input to production.

"This practice also makes a mockery of the argument that price increases can be avoided by increasing gas exploration and extraction."

Reserve Our Gas also said Australia's gas industry was already the most profitable industry in the nation with a profit ratio of 66% compared to 32% for iron ore and 3.5% for coal.

The industry group also feared that gas shortfalls for the Santos-operated Gladstone LNG project and APLNG will end up costing the domestic gas user scene.

"These [LNG] projects have already locked in supply contracts with their overseas customers and if they are unable to achieve the projected production levels from the wells linked to the terminals they will turn to domestic market supplies to fulfil their obligations, creating production shortfalls and supply constraints," Reserve Our Gas submitted.

"This is particularly true of producers who are active in both the domestic and international markets, such as Santos and Origin. Therefore these constraints are primarily a result of policy failure on the demand side by allowing LNG export demand to expand so significantly and rapidly and outstrip production capabilities with little regard for the needs of the domestic market."

The MEU industry group took a different approach, with its submission based on a law firm's views into the inadequacies of existing law to protect the dom gas-using industries from gas supplyside-related monopolistic practices.

"Faced with the three simple problems presented of either a single monopoly pipeline owner extracting monopoly rents or a pipeline with capacity hoarded by one or two shippers or insufficient capacity blocking entry, it is very hard to see that the Competition and Consumer Act will ever be practically relevant or available to protect downstream users, or upstream users for that matter," Dwyer Lawyers wrote in its conclusion for the MEU submission.

Meanwhile, the Australian Petroleum Production and Exploration Association said the most significant obstacles to more competition and a downward pressure on prices were the gas supply-curtailing regulatory restrictions in some states, especially New South Wales and Victoria.

"Policies which restrict exploration, resource development and supply risk creating an artificial shortage of gas and higher prices," APPEA said.

"The inquiry must support and reinforce the removal of regulatory restrictions impeding the efficient functioning of the East Coast gas market."

In its submission utility AGL Energy concluded that the Eastern Australian gas market will reach an appropriate equilibrium point following a period of transition (as the LNG projects come online).

"Reform may be warranted in key areas such as pipeline capacity trading, joint marketing and onshore gas extraction to ensure a smooth transition," AGL said.

In its submission Santos noted that domestic gas prices had risen due to increased exploration, development and production costs plus additional competition among customers for the gas.

It also blamed regulatory uncertainty at the state level, and made reference to its Narrabri CSG project in this regard, but also said it was willing to supply gas to domestic customers when it has available uncontracted gas and available transport capacity.

"Santos is actively negotiating gas sales agreements with large industrial customers, and has quoted more than 10 potential gas sales agreements to domestic customers in the past 12 months alone," the company said.

Submissions to the East Coast gas inquiry issues paper were made available from the ACCC website on Friday.