News State Queensland Queensland ‘most expensive’ state in nation for gas: review

Queensland ‘most expensive’ state in nation for gas: review

Queensland households paid an average of 6.4 cents per megajoule in 2017.
Queensland households paid an average of 6.4 cents per megajoule in 2017. Photo: Getty
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Queensland residential gas prices are the most expensive in the country and more than twice the national average, a report commissioned by the federal government has revealed.

The Gas Price Trends Review 2017, issued late last month, shows Queensland households paid an average of 6.4 cents per megajoule in 2017.

The national average retail gas price was 2.9 cents.

The reticulated (piped) gas network is limited to the state’s south-east and services about 250,000 customers, compared with nearly one million customers each in NSW and Victoria.

Jim Snow from energy consultancy Oakley Greenwood, one of the report’s lead authors, said distance and lower usage were the biggest reasons prices were so high in the sunshine state.

qld gas price
State by state breakdown of megajoule usage of electricity. Photo: ABC

“It comes down to the cost of distribution in Queensland,” he said.

“It’s such a low usage in the households, so it drives up the cost to run all those pipelines.”

According to his analysis, the cost of distribution makes up 3.78 c/MJ of the 6.4 c/MJ price.

The next biggest component is the cut paid to the two retailers AGL and Origin, at 1.5 c/MJ.

This is more than twice the national average (0.7 c/MJ).

Queensland Energy Minister Anthony Lynham told the ABC he would study the report’s findings.

Components of retail gas price in Queensland.
Components of retail gas price in Queensland. Photo: ABC

“I’ll be looking at the retail costs as well as I am looking at retail costs with electricity, and you can see what we’re doing to decrease retail costs for electricity supply,” Dr Lynham said.

“I’ll be having a close look at that document and looking at retail costs for the gas sector as well.”

Ian Jarratt from the Queensland Consumers Association said people worried about high gas prices could consider switching to electricity.

“I’d be thinking in the future – if and when this gas stove goes or the hot water system goes, see whether I can do anything in terms of changing to electricity or bottled gas,” he said.

anthony lynham - qld gas prices
Energy Minister Anthony Lynham said he would “take a close look” at the review. Photo: ABC

Household gas consumption is slowly falling across Australia.

Mr Snow said the rise of solar photovoltaic and back-up batteries had been changing the market.

“Some people love to cook with gas, some people like it for hot water, some people like it for heating,” he said.

“But look, the alternatives are almost a switch on the wall away and that’s the problem for the gas industry.”

-ABC

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