Australian gas bills set to spike by $300 a year, says report – but it’s for the greater good

Australian households face paying up to $300 more a year on their gas bills, a new report has found, as huge changes to the domestic LNG market drive up prices of the fossil fuel.

In a report released on Monday, the Grattan Institute cites the emergence of a national gas export industry projected to be worth $60 billion a year by 2018 as the latest factor driving price increases that could see the energy bills of Melbourne households rise by more than $300 a year, and by more than $100 a year for households in Sydney and Adelaide.

The report – which notes electricity and gas prices for Australian homes have already increased in real terms by 61 and 36 per cent respectively over the past five years – says the further gas price rises will sting domestic consumers who are unlikely to switch to all electric appliances, for a variety of reasons.

But despite the cost to the average Australian, the report  – Gas at the crossroads – stops short of recommending measures to prevent the domestic price hikes, arguing that Australia’s booming gas export industry will deliver overwhelmingly positive economic benefits for the country.

“Governments are already coming under pressure to protect Australian industry and consumers from the price rises,” the report’s author, Tony Wood, writes. “They should resist it.

“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.”

The report recommends, instead, that the government remove any remaining barriers to “a well-functioning market” to ensure the Australia gets the proper value for its gas exports.

“A massive export industry is rising on our northern shores. All Australians have the right to share in its bounty.”