GAS prices in NSW are locked in and set to soar, but debate rages over the vexed issue of increasing domestic gas production.
Prices will rise between $155 and $225 on July 1 for the 25 per cent of household and small gas users that are still on a regulated tariff.
The Independent Pricing and Regulatory Tribunal (IPART) released its the average regulated retail gas prices for 2014-16, which will see prices increase by an average of 17.8 per cent in 2014-15, with prices relatively stable in 2015-16.
The price rises will impact unevenly for users, depending on where they are located and how much gas they use.
IPART chairman Peter Boxall said commencement of east coast gas exports had caused prices to rise.
“As gas starts to be exported from eastern Australia for the first time, the rising costs faced by retailers to supply gas to consumers need to be recouped.
“The ability to export liquid natural gas is driving a fundamental change in eastern Australia’s wholesale gas market.
“With gas reserves being directed to these exports, eastern Australia is becoming part of a single global market for commodity gas, and wholesale gas prices are being influenced by international prices.”
Resources Minister Anthony Roberts said IPART's price hike proves the need to increase gas supply “to help put downward pressure on gas prices".
“The NSW government will continue to work with communities to establish a safe and environmentally sustainable gas supply for NSW residents, businesses and manufacturers," he said.
“NSW imports approximately 95pc of its gas supply, which means we are susceptible to the market price of gas."
However, Greens mining spokesman Jeremy Buckingham said the price impost should be absorbed by gas producers which have worked to increase retail prices.
“The pursuit of coal seam gas is now being felt by households as it sends the price of gas skyrocketing. Coal seam gas has been a huge mistake for Australia,” he said.
“IPART acknowledge that now that the east coast gas market is linked to the international market through LNG exports, pursuing even more CSG in NSW is a comparative drop in the ocean in the international market and will have a negligible effect on gas prices.
“A recent Credit Suisse report made it clear that one of the motivations for Santos investing in export LNG was to inflate the domestic price of gas. This price hike is a deliberate action of the upstream gas industry.
“The $155 – $225 increase to the typical household is unjustified and will go straight into the pockets of the large gas companies, while they divert gas supplies to the export terminals at Gladstone."