Energy prices are to increase on the east coast of Australia amid the rising prices of gas and coal, but it’s a different story for the west coast of the country.
The hike in international coal and gas prices is to be blamed on the war in Ukraine, this is just a one-side of the story, the other part is a gas reservation, which has left Australians on the east coast more inclined towards rising electricity prices.
Although Australia is the largest liquefied natural gas (LNG) exporter in the world, sending 80 million tonnes of gas overseas every year, despite that the Australian Energy Regulator (AER) will increase the electricity prices from July.
The AER is responsible for regulating the wholesale and energy retail market in the nation and is all set to increase the power price from July.
The prices will jump up to 12.6 per cent in Queensland, 18.3 per cent in NSW, and 9.5 per cent in South Australia.
But the rise in electricity prices will not affect Aussies living on the west coast because of the gas reservation policy.
In eastern Australia, there is no such policy, where the states could keep aside gas for use.
It’s entirely different in Western Australia, where the state has a gas reservation policy, which allows it to keep 15 per cent of the gas produced for export.
This reservation policy has helped WA tackle the rising prices in the state. The price increase is significantly modest, jumping by around 60 per cent from an average of $2.13 a gigajoule on May 1, 2022, to $5.55 for June 2022.
Whereas, on the east coast, the gas prices have gone up drastically high, rising by around 529 per cent across two years.
Gas Trading Australia has revealed data, showing a jump in gas prices from an average of $2.13 a gigajoule on May 1, 2022, to around $30.38 the same month on the east coast.
However, the gas prices will continue to soar in the coming months.
Bruce Robertson, Institute for Energy Economics and Financial Analysis (IEEFA) energy finance analyst, said gas prices will continue to go up even though the demand is falling.
“A whole lot of gas-reliant industry will go broke in the next 12 months,” he told news.com.au.
