Energy crisis: Rural households pay twice as much for gas as Melbourne

Ten regional communities are paying at least $1000 a year more for natural gas than most other Victorians. See our graphic to compare prices.

Gippslanders are paying some of Victoria’s highest gas prices, despite it being sourced off their own coast in Bass Strait. . PIC: Sharon Walker

Ten regional communities are paying at least $1000 a year more for natural gas than most other Victorians.

The best deal a household of four can get from monopoly supplier Tas Gas in Heathcote, Lakes Entrance, Maldon, Marong, Orbost, Terang, Swan Hill, Kerang, Robinvale and Nathalia is $2760 to heat their water and homes for less than six hours a day.

Access to a competitive market in Melbourne means the same-sized household can use the Victorian Government’s Energy Compare website to track down deals of $1130 a year.

The massive price difference is due to an expensive delivery system and an 82 per cent hike in Tas Gas’s usage charge for 2023.

The 10 towns were connected to natural gas under the former Victorian coalition government’s incentive program, offering distributors funding in 2014 to cover part of the roll-out cost.

At the time, then-agriculture minister Peter Walsh said the Brookfield Infrastructure Group system of compressing natural gas before it was trucked out to daughter stations, to be piped through the 10 towns, would be delivered “at a price comparable to gas supplied through conventional pipelines connected to the grid”.

Asked why conventional pricing had not been achieved in those towns today, Mr Walsh said “Labor has been in power for eight years”, and it was a lot better than having to use more expensive bottled gas.

LPG suppliers told The Weekly Times the price of a 45kg bottle of liquid petroleum gas had not moved much in more than 12 months, at about $172.

Tas Gas retail general manager Sarah Thurstan said the company was “focused on ensuring a secure, safe and affordable supply of gas to our Victorian customers, and at the same time we need to ensure our business is sustainable through the appropriate recovery of costs”.

LACK OF COMPETITION DRIVES UP PRICES

But it’s not just the 10 towns tapped into Tas Gas’ daughter stations that are paying high gas prices.

It appears a lack of competition is also pushing up prices in Mildura, where Origin is the only supplier listed on the Victorian Government Energy Compare website, with the best offer for a four-person household sitting at $1880 a year.

Even Leongatha, which sources gas from nearby Bass Strait, has access to just two retailers – Origin and Red Energy, with the cheapest annual four-person household bill coming in at $1480.

The number of offers from retailers supplying Bairnsdale households and businesses is also low, which has pushed commercial laundry owner Robert Stewart’s gas bill from $44,000 last year to $74,000 this year.

The Hammonds Laundry owner, who employs 10 locals, said the price hikes made no sense.

“Why are we getting stung, when the gas is out in Bass Strait and underneath our feet,” Mr Stewart said.

Victorian Energy Minister Lily D’Ambrosio’s office said “these prices are a result of privatisation where electricity and gas companies are driven by their own profits not customer affordability – this is the market Mr Pesutto and the Coalition want for Victorians.

“We pushed the Commonwealth to introduce price caps on energy prices and will push further if needed,” she said.

Originally published as Energy crisis: Rural households pay twice as much for gas as Melbourne