Victorians set to endure massive price hikes to gas bills

Victorians are facing some of the steepest gas bill spikes as whopping new charges come into effect from today.

Massive price hikes to gas bills will hit Victorians harder than any state as whopping new charges come into effect from today that will slug some customers an extra $1000 over the next 12 months.

Major retailers have warned households on market offers to expect average price jumps of about 25 per cent, adding up to $480 to their yearly bill and even more for larger families.

By comparison, NSW, Queensland and South Australia have been told to expect increases under $100.

Russia’s invasion of Ukraine has contributed to surging gas prices across the domestic east coast as demand for energy soars globally.

But Victoria is facing some of the steepest hikes compared to other states because the typical home is far more reliant on gas appliances.

About 72 per cent of Victorian households use gas; the state uses more than double the amount of the second-biggest consumer, NSW.

Pressure is mounting on governments to develop a winter plan to help Victorians tackle soaring gas bills, with a cap on prices not expected to trickle through until 2023-24.

Jeremy owns a sporting apparel company and has been affected by the price rises of gas. Picture: Jake Nowakowski

Gavin Dufty from St Vincent de Paul Society Victoria said gas consumption went through the roof between May and November because Victorians were relying on it to heat their homes.

He said households were going to be “smashed with ­really big gas bills” this winter.

But he said what little resources people had would be hoovered up by then amid rises in interest rates, rents, transport, education, water bills and council rates.

“It will push people into a horrendous financial position where they’ll have to make decisions about putting food on the table, paying rent, or paying a utility bill and sitting in the dark,” Mr Dufty said.

He acknowledged the federal government’s gas price cap and power bill relief for low-income households but warned the Commonwealth and the state needed “more in their back pocket” as the full extent of hikes is realised.

“We would like to see a fully formed plan for winter, as yet we haven’t seen one,” Mr Dufty said.

“If we are going to do a transition off gas … maybe now is the time to really help those households that are getting smashed.”

He said measures could include more financial support, boosting the concession, raising the amount and eligibility of one-off crisis payments, as well as a $250 state rebate for gas, mirroring the offer for electricity.

About 72 per cent of Victorian households use gas.

Victorian Council of Social Service chief Emma King said the price hikes would hit families hard.

“As we head into winter, people will be forced to choose between heating and food,” she said.

Those hurting the most will be people earning lower incomes, living in poorer quality homes and using outdated heating and cooking appliances, Ms King added.

“The Victorian government should be offering direct cash subsidies and more no-interest loans to help renters and struggling homeowners upgrade to electric appliances.”

Treasurer Jim Chalmers last month reiterated that the bill increases, forecast late last year, were what prompted the government to implement the $12 a gigajoule price cap on new wholesale contracts between producers and retailers.

A spokeswoman for Energy Minister Chris Bowen said the gas price cap will help take some of the edge off forecasted increases. “It applies to gas sold by producers which will gradually reduce retail supply costs, flowing through to lower price increases for consumers,” the spokeswoman said.

Retail gas prices are now predicted to rise by only 4 per cent compared to 20 per cent in 2023-24, according to ­Treasury.

Details about the energy bill relief for “millions of households and small businesses” in the May budget are expected in coming weeks.

Melbourne textile business owner Yaron Flicker is feeling the pinch following soaring gas prices. Picture: David Caird

National cabinet is also expected to speak about energy at its Friday meeting. Work is also underway to reform the mechanism to ensure there is sufficient natural gas supply to meet predicted needs.

Submissions about the proposed mandatory code of conduct for the gas industry, including the reasonable pricing provision, close next week.

The peak body representing oil and gas producers maintains the key to lower gas prices is new supply and has repeatedly lashed the state government for not increasing its gas production.

APPEA chief Samantha McCulloch said: “The recent government interventions, including the 12-month price cap and ongoing price regulation as part of the proposed Mandatory Code of Conduct, have brought massive uncertainty to the market and will result in less investment in supply – the opposite of what ACCC say is needed – and ultimately increasing gas prices.”

Meanwhile, Anglicare Australia is urging the federal government to further invest in a national scheme to upgrade and improve the energy efficiency of low-income and rental households.