What is causing the gas prices to shoot up?
Australia is currently experiencing a gas crisis. Gas prices are soaring across the country, and it doesn’t look like there’s going to be any respite in the near future.
Heavy Gas Export
The truth is that Australia is one of the world’s top three exporters of liquid natural gas, right up there with Qatar and the USA. This is the fundamental reason why Australians are experiencing rising gas and electricity bills.
Around 80% of Australian gas is exported, leading to a domestic shortage. Too many companies are exporting overseas and leaving Australian gas prices open to international market volatility. In May 2022, even the AER raised the default market offer.
Russia Ukraine War
Sanctions in Russia have made it challenging to import Russian fossil fuels, but that’s not the only reason the price of oil and gas is rising.
Russia dominates the world’s energy supply, but sanctions have limited its ability to sell its products to other countries. It has created a global demand for fossil fuels that no other country can meet. As a result, prices for those commodities are going up across the board.
Federal government policy
The Australian Government has taken a very hands-off approach to the gas industry.
An international market experiencing a supply shortage has created the perfect storm: high gas prices and a lack of domestic supply.
Gas companies in the eastern states of Australia have been given free rein to export as much gas overseas as possible. This leaves domestic gas prices vulnerable to international market fluctuations.
As a result, Australians are finding themselves paying more for gas than ever before. And as if that wasn’t bad enough, power bills have increased by an average of 14%.
How long will the rise continue?
The Australian government is committed to growing the renewable energy sector to reduce coal and gas power demand and prices. Authorities and citizens both realise the urgency with which this switch needs to be made.
New transmission lines need to be built to connect zero-emission renewable energy projects to the grid, which can take years. As long as the problem is on the supply side and there is a heavy reliance on fossil fuels, energy prices will continue to soar.
How to save on gas bills?
If you are a family or a business paying too much for your energy bills, it’s time to consider alternatives. It’s time to shop around.
According to Clare Savage, AER chairperson, customers can save around $443, or 24%, off their bill, and small businesses can save approximately $1,308 or 29% by switching.
It’s easy to see why:
- When you switch suppliers, you’re not just changing a supplier. You’re changing the company that provides your power.
- The more options you have, the better deal you can get from your new provider.
- You can use energy and gas comparison tools to find and lock in a fixed-rate plan, so the cost won’t go up for 12 months, protecting your rates against any price hikes. And even if you can’t find any fixed-rate plans there are still many variable rate plans available that may be cheaper than your current charges with your existing energy provider.
Final word
The good news is that it’s never been easier to switch to another provider with so many companies in the market.
You can call your current gas provider and find out what rates, discounts and rewards programs are offered. Then you can compare these gas plans using the Select and Switch free online comparison tool to find the most relevant gas and electricity prices to your needs.