Federal parliament will return on Thursday in order for the government to pass its plan to lower rising energy costs for households and small businesses.

Gas will be temporarily capped at $12 a gigajoule for 12 months, while coal will be capped at $125 a tonne.

However, Greens leader Adam Bandt said the party would oppose plans for the government to compensate gas and coal companies for the temporary caps.

Bandt said the party would meet on Tuesday to settle its final position on the legislation.

“The greedy coal and gas corporations should be compensating people, not the other way around,” he said.

“People need more support than the government is offering. Without a plan to get people off gas, the price pain will start up again as soon as Labor’s temporary cap ends and we’ll be back here in 12 months’ time.”

The government has also announced plans for $1.5 billion to be provided for energy bill relief for eligible households and small businesses.

The relief measures aren’t expected to come into effect until the second quarter of 2023, with state and territory governments paying out the funds to customers.

Energy Minister Chris Bowen said while gas companies had been critical of the plan for caps on prices, the measures would protect households and businesses from large increases.

“This is Australian gas on Australian soil and Australians should pay a fair price but they shouldn’t be paying a wartime price,” he said.

“There were businesses and industries saying very clearly that they would have a lot of difficulty surviving next year, in the face of gas prices, electricity prices being what they were.”

Oil and gas exploration stakeholders have also requested an urgent meeting with Prime Minister Anthony Albanese over the proposal, saying the intervention could reduce gas supply, pushing up prices for households and businesses.

The Australian Petroleum Production and Exploration Association said a draft of the legislation showed the government’s intended intervention into the market was more extensive than previously revealed, and could damage investor confidence.

“The oil and gas industry welcomes relief from energy prices through the proposed energy rebates,” APPEA Chief Executive Samantha McCulloch said.

“But a price cap combined with the emergence of other damaging measures will ultimately push up prices because they will undermine investment confidence and reduce new supply.

“The powers provided through the bill are extraordinary, providing for the government to control the entirety of the market and intervene in an essentially unlimited way,” she said.

The coalition has also criticised the energy plan, saying there was little detail on how it would work.

Opposition energy spokesman Ted O’Brien said the scheme would lead to a disaster in energy policy.

“It is a monster in the making because it not only will fail in the short term but it will have a disastrous effect on the industry over the longer term because it kills supply.”