20 October 2014
Gas prices will explode due to Queensland exports, says Grattan Institute
Larger households that use gas for cooking, hot water and heating will be hit with a yearly bill increase of up to $435 in the eastern states and the government should do nothing to intervene, the Grattan Institute has said.
In the next two to three years, high gas users in Sydney will face a $255 increase while, in Melbourne, where 90 per cent of homes are connected to mains gas, users will see a $435 jump, according to the think tank's new report [PDF, 733 KB].
The increases are linked with the launch of gas exports in Queensland early next year that will expose Australian families and businesses to high global prices. The Grattan Institute based its calculations on the forecast that wholesale gas prices will double to $9 a gigajoule.
Calls are mounting for the government to shield Australian users from rocketing prices by reserving a percentage of gas for domestic use.
But Tony Wood, energy program director at the institute and the report's author, is opposed to all forms of government intervention that may hinder investment and therefore "economic benefits" such as jobs.
He said governments should avoid imposing a cost, or "an implicit tax", on companies in a bid to help poor and disadvantaged people already struggling with soaring energy bills.
"If the prices impact people on low incomes, then the way to fix that is through existing welfare provisions," he said.