Peter Dutton’s plan to reduce gas bills by 7 per cent

Peter Dutton has revealed all on his big plan to slash energy prices revealing it will reduce gas bills for residential customers.

Peter Dutton has revealed all on his big plan to slash energy prices revealing it will reduce gas bills for residential customers by an estimated 7 per cent.

After weeks of pressure to reveal exactly how much consumers will save, he has revealed new modelling suggests that the policy is expected to bring down electricity prices by 3 per cent.

The Liberal leader provided no firm predictions of the actual savings on average bills.

But based on a gas user with an average quarterly bill of $200, it would save families $14 a quarter or $56 a year.

The reductions will be more significant for industrial customers, delivering a reduction in gas prices of up to 15 per cent.

A Canstar Blue survey conducted in December 2024 found the average quarterly gas bill in Australia to be $170.

The highest gas prices in the country are in South Australia, Victoria and the ACT.

The opposition leader unveiled his long-awaited gas reservation scheme last month in his budget reply speech.

He has also vowed to slash fuel excise by 25 per cent but only for a 12 month period.

Peter Dutton has revealed all on his big plan to slash energy prices revealing it will reduce gas bills for residential customers by an estimated 7 per cent.

Mr Dutton pledged a national gas plan that he claimed would “prioritise domestic gas supply, address shortfalls and reduce energy prices for Australians”.

Under the proposed reservation policy, gas companies would be required to divert more gas to the Australian market, rather than sell it overseas. Dutton also pledged measures to speed up development approvals for proposed gas projects.

But he didn’t reveal how much residential customers would save under the scheme until now - releasing the details to coincide with his first major debate with Anthony Albanese.

“We sit on some of the most abundant gas reserves in the world — it’s time we unlocked those resources to lower prices, protect jobs, and power Australia.

“Gas is critical to our nation’s energy future,‘’ Mr Dutton said.

Peter Dutton has revealed all on his big plan to slash energy prices revealing it will reduce gas bills for residential customers by an estimated 7 per cent. Picture: Jason Edwards / NewsWire .

“By making the gas companies put more of our Aussie gas into our market instead of exporting it, we will get the price of gas down by 15%. ”

However, the 15 per cent reduction applies to industrial customers.

The savings for residential customers is around half that at 7 per cent.

The new modeling suggests it will flow through to an 8 per cent reduction in wholesale electricity prices.

However, it will only deliver a 3 per cent reduction in residential electricity prices.

Mr Dutton has pledged to legislate a fit-for-purpose “gas trigger” or Australian Domestic Gas Security Mechanism as a last resort measure.

Frontier Economics’ Danny Price said the Coalition had announced a policy that provides long-term secure access to affordable gas and “prepares us for a balanced mix of renewables and on-demand generation based on nuclear power.”Frontier Modelling said that wholesale gas prices can ultimately be expected to flow through to reductions in retail gas prices.

“However, there can be a lag in wholesale gas price reductions flowing through to retail gas price reductions as existing contracts are replaced by new contracts,‘’ the briefing paper cautions.

“The extent of the percentage reduction in retail prices depends on how much of a customers’

retail bill is accounted for by gas commodity costs (as opposed to the cost of transmission and

distribution pipelines and retail costs).

Mr Dutton has pledged to legislate a fit-for-purpose ‘gas trigger’ or Australian Domestic Gas Security Mechanism as a last resort measure. Picture Thomas Lisson / NewsWire

“Since gas commodity costs account for a larger proportion of the retail bill for industrial customers, industrial customers receive a bigger percentage reduction in their retail bill than residential customers.

“For residential customers, gas commodity costs are a much smaller proportion of the total retail bill.

“This is not because it is cheaper to purchase wholesale gas for residential customers, but because supplying gas to residential customers requires significant costs for the use of the gas distribution network.

“This data suggests that, on average, across the east coast gas market, 32 per cent of the cost of supplying residential customers is accounted for by gas commodity costs (wholesale costs).

“Based on this contribution of gas commodity costs to the retail price for residential customers, a 23 per cent reduction in gas commodity prices would be expected to result in a 7 per cent reduction in retail gas bills for residential customers.“

“Our modelling suggests that this reduction in gas commodity costs in 2025 and 2026 would result in a reduction in wholesale electricity prices of around 8 per cent.

“While there can be a lag in wholesale electricity price reductions flowing through to retail electricity price reductions – both due to contracting and due to the way that regulated retail electricity prices are determined – this would ultimately be expected to lead to a reduction in residential electricity prices of around 3 per cent.”

Originally published as Peter Dutton’s plan to reduce gas bills by 7 per cent