Prime Minister Malcolm Turnbull has defended an intervention in the energy market, saying it could halve wholesale gas prices and save up to 65,000 jobs.

Key points: The Government will step in and impose gas restrictions, prioritising domestic use first

The Government will step in and impose gas restrictions, prioritising domestic use first The Government says export control will make domestic prices internationally competitive and "help keep prices low"

The Government says export control will make domestic prices internationally competitive and "help keep prices low" Labor and industry groups are welcoming the move

The Federal Government will impose export restrictions on gas that could force producers to boost supply for domestic users before they are allowed to send gas offshore.

The vast majority of gas produced in Australia is shipped overseas, a situation which, along with bans or restrictions on gas exploration in some states, has been blamed for increasing prices.

Mr Turnbull said the control would lower gas prices and ensure businesses were not burdened with increasing prices, potentially leading to job losses and closures.

"[Wholesale prices] will be cheaper than the prices that are being offered now," he said.

"People in Australia are being offered prices of $20 a gigajoule, it should be around half that."

But Mr Turnbull sought to clarify those comments two hours later, saying not all gas prices would be halved.

"When the market is in balance, when it is adequately supplied, wholesale prices should be not materially different from the export price," he said.

'Hot air, just words': Labor

Sorry, this video has expired Bill Shorten asks PM to say when gas prices will halve

Labor has cautiously welcomed the announcement but questioned whether it would lower electricity prices.

"If Mr Turnbull's promised Australians that gas prices will halve, I want to hear that promise from the gas companies," Opposition Leader Bill Shorten said.

"Without the gas companies confirming that, what Mr Turnbull is saying is just hot air, just words."

Mr Shorten said he would not apologise for recommending similar interventions.

"I made no apology for saying that the system is a joke," he said.

"I make no apologies for believing that Australian gas should be prioritised for Australian domestic needs first and we need to make sure the gas companies are being truthful with us."

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Solution is more gas, not regulation

The Australian Petroleum Production and Exploration Association (APPEA) is disappointed with the announcement.

"Restricting exports is almost unprecedented for Australia," APPEA chief executive Malcolm Roberts said.

"At a time when we need billions in new investment to create more gas supply, any intervention which creates sovereign risk is alarming."

Mr Roberts is not convinced the export restrictions will reduce power prices.

"Electricity prices are rising for a number of different reasons, it's not just related to gas prices," he said.

"More volume in the market will definitely put downward pressure on prices, but the most sustainable way to do that is to create more supply."

Industry warn crisis remains

Australian Industry Group chief executive Innes Willox welcomed the intervention and said the sector had been calling for the Government to help businesses.

Mr Willox has warned that the electricity crisis threatens tens of thousands of jobs unless a more interventionist approach is adopted.

"This move will certainly assist businesses going forward to make some decision about their viability," he told AM.

Mr Willox said he was optimistic the threat of export restrictions would be enough for gas companies to change the way they operate.

"We need to get the supply flowing and the prices down, and the gas producers have a big role to play in that," he said.

"They are not the only ones who have a role to play, but they are key to it," he said.