Gas prices set to double as exports begin  

Eyes are turning to Queensland, and not just to focus on the state election. According to a report in The Age, BG Group have begun exporting liquefied natural gas to overseas buyers, with Origin and Santos set to follow their lead later this year.

Although Western Australia has been exporting gas since the 1980s, it’s the first time that our natural resource on the east coast has been exposed to international markets, a move that is likely to force the price from around $3 – $4 per gigajoule as high as $6 – $8.

Even admist the uncertainty of the current energy market, export pricing of up to $13 per gigajoule throughout Asia means that we too will soon be paying more for domestic gas.

Although the price hike was limited to NSW where regulators have approved a retail price increase of 17.8%, Victoria will also be affected as southern suppliers sell their product in the same northern gas markets as its competitors.

The news isn’t too bad in states like NSW where the winters are less severe, with only a $100 per year increase predicted. Sadly in the southern states including Victoria estimates from The Grattan Institute suggest households will be stung an extra $270-$300 annually.

Unsurprisingly, an increase of this magnitude more than negates the benefit of the carbon tax repeal that many hoped would relieve cost of living pressures.

A recent report from the Alternative Technology Association demonstrated that solar technologies and efficient electric alternatives like heat pumps would deliver financial benefits to new homes that didn’t connect to gas.

Tristan Edis from Business Spectator claimed that the report busted “entrenched views that gas is a cheaper and more convenient option than electricity”.

Those looking to save money on their bills over the coming years would be advised to keep in to mind the main factors driving up their cost of living – and what can be done about it.