Gas prices fell significantly during the past year, according to the Australian Competition and Consumer Commission's latest gas report, driven in part by the COVID-19 pandemic.

The report, released on Tuesday, highlights that these lower prices may not last, and that the risk of a supply shortfall remains.

While east coast gas supply is expected to meet demand during 2021, a shortfall may arise in the southern states by 2024, while the broader east coast gas market faces the risk of a shortfall in 2026.

"It is concerning that the risk of a gas supply shortfall in Australia’s southern states continues, despite this having been a looming issue for some time," ACCC chair Rod Sims said.

"It is crucial that investment decisions are made now to ensure there’s enough supply, and to provide downward pressure on future price rises,” Mr Sims said.

The fall in gas prices has been in part driven by record low oil and LNG spot prices exacerbated by the COVID-19 pandemic.

“We welcome the narrowing of the once-large gap between domestic and export parity prices, but despite some improvement domestic customers are still paying more than overseas customers,” Mr Sims said.

“LNG producers have not provided an adequate explanation as to why this is the case, or why we should accept it.”

The report also provides, for the first time, analysis of suppliers’ pricing strategies, obtained under the ACCC’s compulsory information gathering powers.

“Our preliminary analysis suggests that competition between suppliers has been a limited constraint on gas prices over the past few years,” Mr Sims said.

“Suppliers appear more concerned by the threat of regulatory intervention. This is not the sort of behaviour you’d expect to see in a well-functioning competitive market.”