The federal government wants the states to pull their weight in the war against soaring energy prices as it rushes to find a solution to the impending energy crisis.
Since the budget in October, the government has been investigating big stick interventions in energy markets to keep prices contained, with fossil fuel price caps potentially on the agenda.
But both the NSW and Queensland premiers have voiced their concerns about capping coal prices, and called for federal compensation if such measures start eating into state finances.
Assistant Treasurer Stephen Jones urged the states to put their differences aside and focus on the shared goal of bringing down energy prices.
"This has got to be a team Australia moment - we're asking NSW, Queensland, Victoria, all the states, to put squabbling aside and have the interests of the Australian people in mind," he told 2GB.
Mr Jones said state governments hold all the levers on coal prices and control about 80 per cent of energy prices.
"Penny pinching and who does what and who pays for what is not going to get us an outcome," he said.
Despite the posturing from the states, the government remains positive it can land a solution that will suit everyone at next Wednesday's national cabinet meeting.
But Opposition Leader Peter Dutton empathised with the premiers' confusion, with speculation circulating for weeks about the design of the market interventions.
"Australian families and small businesses who are really doing it tough in this cost of living crisis Labor's created, they are really going to want from their government a plan that can reduce power prices, electricity prices and gas," he said.
"So let's stop hearing about the thought bubbles, and all of the talk of different options, and let's hear from the government as to what it is they're going to do."
The federal government has been weighing up regulatory options to ease energy prices since the October budget showed electricity prices likely increasing by 56 per cent over two years and gas prices by 20 per cent annually in the same period.
Industry groups have warned of potential impacts on investment
