Finance Finance News Pain for households as gas prices soar

Pain for households as gas prices soar

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NSW households face more utility bill pain, with gas prices set to rocket 17.6 per cent from July 1, adding up to $224 a year to an average bill.

The Independent Pricing and Regulatory Tribunal (IPART) revealed the draft proposals on Wednesday, with Australia’s growing export market and the carbon tax copping the blame.

The rise means an average household will have to stump up an extra $150 to $224 for their annual gas bills from July 1, depending on the supplier.

Gas prices in NSW have already increased by about 40 per cent in real terms between 2006 and 2014, piling enormous pressure on some households.

Electricity prices have increased by more than 80 per cent over the same period.

The latest gas price rises, which are subject to public consultation before being rubber-stamped in June, apply to households on regulated tariffs (about 25 per cent of the state).

However, those on unregulated tariffs also face significant price hikes, driven by rising wholesale costs.

Small businesses also face significantly increased gas bills.

IPART said wholesale gas costs were mostly to blame, fuelled by Australia’s growing gas export industry and the carbon tax.

A growing number of gas export facilities, mostly located on the eastern seaboard, means Australian-based gas producers are increasingly able to sell liquid natural gas overseas, mostly to Asia, at a higher price.

IPART suggested domestic gas prices will essentially merge with the higher international prices over time, as export facilities continue to grow.

The 2014-15 gas price rises have been calculated with a carbon tax component.

But the 2015-16 prices have not and IPART said if the carbon tax was not repealed, prices could rise again.

The federal government has introduced legislation to dump the carbon tax but it faces a tough task getting it through the Senate.

NSW Energy Minister Anthony Roberts used the price rises to urge Labor and the Greens to support the carbon tax repeal bill.

Premier Mike Baird said he would raise the issue at next week’s Council of Australian Government meeting.

NSW Opposition Leader John Robertson said the state government should push for a reservation policy for domestic gas use, instead of blaming the hike on the carbon tax.

“We’re seeing massive increases in gas because suddenly the eastern seaboard is exposed to the global market,” he said.

“That’s pushing prices up.”

Reservation policies were used in other countries to protect families from price shocks, Mr Robertson said.