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Australian gas prices set to rise

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50% increases are possible.

As Australia ramps up its LNG production capacity, an oversupplied global market and increased exposure from exports will likely drive up wholesale prices and in turn, residential gas bills.

NAB's Gas and LNG Market Outlook: January 2017 says new gas terminals in Western Australia, Queensland and the Northern Territory will give Australia the world's largest LNG production capacity.

The bank expects its Australian LNG export price indicator to finish 2017 at around $8/GJ.

NAB's outlook warns of increased wholesale prices. Big businesses are already feeling the squeeze and this inflation of costs is likely to be passed on to Australian households.

Should spot and domestic contract prices move consistently into the $8-10/GJ range, alongside trend increases in other costs, the price of gas for residential customers in Australia's five largest cities could increase by more than 50% by 2020, according to the report.

Although wholesale gas prices typically account for a smaller proportion of residential bills, NAB says price hikes may lead to a substitution to electricity, particularly for space heating.

While prices are likely to remain subdued in the short-term, higher volumes will boost export values.

The report forecasts the annual value of Australian LNG exports to exceed $27 billion in 2017 and approach $35 billion in 2018, surpassing coal as the nation's biggest export after iron ore.

Residential electricity bills across Australia are expected to rise in every state, except Queensland and Tasmania, over the next two years, according to the latest Australian Energy Market Commission study.

Most Aussies have both electricity and gas for energy but are often lackadaisical deciding on suppliers. In many states, the energy market is highly competitive, and shopping around can save you lots of money.

Use our comprehensive guide to compare and contrast different offers from a variety of energy suppliers.

We've also got tips to help you properly read your energy bill and understand the fees you encounter.

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