KEVIN RUDD and Woodside Petroleum have locked horns after the oil and gas giant said it would pass on to consumers the $2.5 billion tax impost on condensate, the light-crude oil it extracts from North-West Shelf gas.

In a gift to West Australian Liberals fighting the state's September 6 election, Woodside's chief executive, Don Voelte, said yesterday that the North-West Shelf joint venture would raise the price of gas in the WA domestic market.

"It will be passed on to customers over the next few months and years as we reopen domestic contracts," he said.

"We're just stating the obvious here. Businesses pass on these types of costs, and we pass them on to our customers."

Mr Voelte was commenting as Woodside posted a first-half net profit of $1.02 billion, a 67 per cent increase for the corresponding period last year.

For more than 30 years the company had enjoyed an exemption on paying excise on condensate but that was removed in last May's budget.

The tax is worth $2.5 billion over four years and is part of the $6.2 billion in budget measures the Coalition has vowed to block.

Mr Rudd did not rule out yesterday sooling the Australian Competition and Consumer Commission onto Woodside and its five partners should there be a uniform price rise.

"Woodside are not happy, let's just be blunt about it," Mr Rudd said. But the excise exemption was to encourage the development of the industry "some decades ago".

"Now some decades have now passed and I think it's time the broader Australian taxpayer got a return on all that."

The Coalition gave Woodside a large tax cut seven years ago when in government and the Resources Minister, Martin Ferguson, said he could recall Woodside lowering gas prices then.

The Greens and the independent senator Nick Xenophon are inclined to support the Government on the condensate excise, leaving the passage of the excise legislation to Family First's Steve Fielding, who is yet to decide.

Despite the Opposition Leader, Brendan Nelson, saying last week the tax was "not likely" to affect domestic gas prices, a delegation of West Australian Liberal MPs and senators, led by Julie Bishop, used Mr Voelte's threats to demand Mr Rudd drop the tax.

The issue is damaging Labor in the west and Senate debate on the bill was postponed yesterday until after the WA election.

Mr Voelte also repeated warnings that the Government's proposed emissions trading scheme would jeopardise billions of dollars in liquefied natural gas investment projects.