Australia’s oil and gas industry would deliver almost $160 billion in taxes and royalties to governments over the next five years if high international prices persist under existing tax settings, new independent analysis by Wood Mackenzie shows.

This represents around $80 billion more than under typical long-term price assumptions equating to nearly $17 billion per year in additional revenue flowing to federal and state budgets.

Australian Energy Producers Chief Executive Samantha McCulloch said the findings reinforce that Australia’s existing fiscal framework including the Petroleum Resource Rent Tax (PRRT) is already working as intended.

“Australia’s oil and gas fiscal regime is designed to deliver strong returns to the community, and this analysis shows it does exactly that, especially when prices are high,” Ms McCulloch said.

“As global energy markets tighten and commodity prices increase, the benefit flows directly to Australian governments through higher company tax, royalties and PRRT receipts.

“The analysis shows the PRRT would deliver the largest uplift in tax revenue, with a 70 per cent increase in oil prices almost trebling receipts from $13.5 billion to $38.9 billion over five years.”

The analysis compares a sustained oil price of around US$120 per barrel with a typical long-term assumption of US$70 per barrel, showing government revenues already increase as commodity prices rise.

Ms McCulloch said the findings come at a time when global energy market disruptions have underscored the importance of Australia’s oil and gas industry to domestic supply and regional energy security.

“Australia’s oil and gas industry is making a substantial contribution to government revenues, while continuing to deliver reliable energy at home and supporting energy security across our region,” she said.

“Domestic gas prices remain stable and well below international levels, and our LNG exports are helping secure supply chains for critical fuels into Australia from key regional partners.

“Assertions that the industry is not paying its fair share, or that the tax system does not respond to higher prices, are demonstrably wrong.

“In contrast, higher taxes will make Australia uninvestable for new oil and gas projects, putting our future energy security at risk,” she said.

Australia’s oil and gas industry is already Australia’s second-largest corporate taxpayer, contributing $21.9 billion in taxes and royalties last financial year.

Read the report: Wood Mackenzie report Energy