Why are gas prices going to increase again?

Have you heard rumours about an increase in the amount you're paying for gas prices? You're not alone in wondering what is behind this proposed hike.

Upcoming increases in the gas tariff have been announced by some gas suppliers in New South Wales, and this could push the average household bill as high as $1,136 per year, according to a February 17 article in the Sydney Morning Herald.

Those in Queensland may also see a jump in the cost of powering their homes with gas.


Much of the gas that is produced in Australia will not go towards powering our fair shores, but will instead be sent across the world for export. 

Demand for gas is high in the Asian markets and suppliers are able to get high prices when they export.

This reduces the amount of gas available to households in the domestic market and means many Aussie households are now paying the higher export price for the service.

Not enough infrastructure

Another reason for the hike is there might not be enough pipelines to transport gas around the country.

The Grattan Institute recommends gas producers respond to the needs of their customers so they can meet growing demand in both the long and short term.

With gas supplies estimated to last for at least another 200 years providing consumption does not increase, this type of investment could help Australia to reap the benefits of its resources.

Less accessible

Another reason that may have also contributed to the price hikes is the availability of gas. Previously, it was easy to develop and find gas fields, but it has become more and more difficult to track new sources, which has led to a decrease in the supply available to the domestic market.

Impact of renewable energy

Many are switching to renewable energy sources rather than using gas, which is seen as being harmful to the planet as a result of its higher carbon emissions.

However, gas plants produce fewer carbon emissions than coal and there is no need to worry about the waste disposal associated with nuclear energy.

As more people switch to greener energy, the price of gas may increase thanks to the economic factors of supply and demand.

How a comparison could help

It is important to shop around for your energy needs to make sure you are getting the best deal possible in your area.

Switching to another gas supplier might be a way you can actively reduce the amount you need to spend on your gas prices, so why not do a comparison now and see how much you could save?

Posted by Paul Doyle.