The Australian Energy Regulator (AER) announced a final price hike from July, citing “significant” pressure on global coal and gas prices due to the ongoing Russia-Ukraine conflict.
According to the Xinhua news agency, the biggest price hikes will be in New South Wales (NSW), where energy costs will rise by 8.2 percent adjusted for inflation, and by 5.5 percent in Queensland.
This means that the average Sydney resident would spend roughly A$100 ($70) more for power each year, putting even more strain on residents already feeling the pinch from headline inflation of 5.5 percent.
Advertisement
According to the AER analysis, the rise was caused by a combination of reasons, including both local production failures and harsh weather in NSW and Queensland, as well as international conditions.
According to the report, “factors contributing to increases in the draft predictions included a drop in thermal generation due to unanticipated outages and increased coal and gas costs, a stalling of new capacity investment, and increasingly ‘peaky’ demand.”
“These conditions have persisted, exacerbated by the ongoing conflict in Ukraine, which has put enormous downward pressure on coal and gas prices around the world.”
The Australian Energy Regulator (AER) determines the Default Market Offer (DMO), which is the highest price that private energy retailers can charge customers.
Following the announcement, the peak body for energy retailers and generators the Australian Energy Council (AEC) urged consumers to shop around to soften price shocks.
“An increase to the DMO is news that most of us could have done without. No one likes to see prices rise, and with the current cost of living pressures, it’s important that consumers shop around for the best deal,” said AEC Chief Executive Sarah McNamara.
“Default offers are not the cheapest deal out there, they exist for customers who aren’t shopping around for a better energy deal,” she added.
(with inputs from IANS)
Advertisement
