Gas prices connected to economic growth and foreign demand

The recent announcement of several resource projects has fuelled speculation over how they will impact gas prices.

Two major factors will come into play over the next decade - economic growth and foreign demand for the resources being mined in Australia.

Modelling performed by consultancy group SKM MMA - as requested by the Office of the Queensland Gas Commissioner - has looked at a number of scenarios concerning the low-to-high economic growth in an effort to predict energy price rises.

Medium growth could see gas prices rise to $5 to 7 per gigajoule - whereas higher growth would see it increase to $7 to 9.

The other factor is the degree of demand from other nations.

Australia will export a large portion of liquid natural gas to countries such as Japan, China and South Korea.

As foreign nations compete for resources, the flow-on effect may see further increases in the domestic market.

The resources boom will inevitably contribute to economic growth in Australia and it is likely to continue in other countries too.

Australian households should prepare by implementing measures that increase their energy efficiency and lower their bills.

They can also consult a switching service which may allow them to make savings by finding a supplier with a cheaper rate.

Posted by Callum Fleming