powering smart financial decisions

Australia's biggest gas-guzzling state about to pay up!

Australia's biggest gas-guzzling state about to pay up!

Melburnians will soon be forking out more for their gas expenses, on top of their home loan, food and transport costs.

The average household bill will spike by over $300 per year, according to newly released research from the Grattan Institute.

So why is this — and what can those living in the Victorian capital do about it?

Costs aren’t evaporating

Households across the nation that use gas to power their appliances, keep warm and more have experienced a 36 percent hike in their bills over the last half-decade.

Electricity prices have shot up even more drastically — by 61 percent over the same period.

Big changes are in the pipeline for the gas industry. Homeowners who rely on this energy source will experience even more drastic price increases than previously seen. But the Grattan Institute has reservations about how to address this.

“Reserving or subsidising gas for domestic use will add more costs than benefits and do nothing to increase supply. And in the long run, protection harms everyone,” said Tony Wood, Grattan Institute Program Director.

Big changes for Australia

According to the report, titled Gas at the Crossroads, Australia’s headed to become “the world’s biggest gas export industry”. Liquefied Natural Gas facilities are located in the Queensland area mostly, while there are gas supplies in Western Australia, too.

It’s expected that the nation’s gas export industry could be worth $60 billion annually.

But this will impact gas prices on a domestic level, given that overseas buyers are willing to shell out big bucks for Australian gas.

“As a result, many households will reconsider the benefits of gas against electricity. Some will replace gas appliances with electrical ones and won’t return any time soon,” Wood explained in the report.

“Most may just cope with higher prices, because they still prefer gas for cooking or heating, or they aren’t able to justify the immediate cost of switching or they are just confused by the competing choices.”

Where to from here?

Melbourne residents were singled out in the report, given that they are the “heaviest household users of natural gas” of the entire country.

Over 90 percent of Melburnians have mains gas connections. Across Adelaide households, this figure drops to 75 percent, followed by Sydney (50 percent). Approximately four in five Perth households have mains gas connections, although consumption is low in the west.

If you’re living in Melbourne, you might want to start buffering your savings account. It’s estimated high gas users in the sprawling city will pay an additional $435 annually in years to come, while medium gas users will face a $320 hike. In Sydney, high gas users will fork out an estimated $225 extra per year, while the figure in Adelaide is expected to be $200 annually.

Consider comparing energy providers’ offerings or even switching to electricity in order to ditch price rise!

Did you find this helpful? Why not share this news?



Related news