Gas prices up $380: How to pay less in 2023
Pressure within the wholesale gas market promises to make 2023 another tough year for households.
From 1 January 2023, several gas providers have increased prices on their standing offer and variable rate plans.
Victorian households look to be the most heavily impacted with all 3 major energy retailers AGL, Origin and EnergyAustralia increasing standing offer prices by over 20% or around $300 a year.
EnergyAustralia customers on a standing offer in Victoria could end up paying $380 more a year.
If it has been more than 12 months since you last compared and switched gas plans now might be the perfect time. Most people won't notice the increase until their next quarterly gas bill is due.
If you're on a fixed-rate plan you won't need to worry for the moment, but check your contract for when your plan ends and set a reminder to switch. Your provider will also inform you via your preferred contact method.
The situation isn't as bleak in other states.
AGL for example says its average residential gas customer on standing offer or variable rate contracts is looking at a 9% increase in NSW ($78 more per year), 5% increase ($40 more per year) in QLD and a 6.2% increase ($56 more per year) in SA.
It's not just larger providers putting up their prices – Alinta Energy, 1st Energy, Lumo Energy, Red Energy, Momentum and Sumo have also announced they'd be increasing their gas prices this year.
Why are prices rising?
Energy retailers are pointing the finger at the Russian invasion of Ukraine which has affected global electricity and gas wholesale prices.
Gas price increases were first announced at the start of December.
At the time EnergyAustralia chief customer officer Mark Brownfield said "We face gas cost increases in 2023 through our longer-term wholesale gas supply contracts. Of more concern, the cost of purchasing new wholesale gas for 2023 has increased up to three times following the war in Ukraine. Higher wholesale gas costs, unfortunately, have led to higher retail gas prices."
What support is available?
Retailers are urging customers who may have trouble paying for their next bill to get in touch.
You can be put on a payment plan or similar program to stay connected.
An Origin Energy spokesperson said "Increasing prices is never a decision we take lightly, especially at the moment when we know some people are struggling with higher costs of living.
"To help protect people who can least afford any price increases, we will invest at least $20m to support customers in our Power On program this financial year including offsetting any price increases to make sure they won't be impacted."
Federal and state governments are also taking steps to provide assistance. At the end of last year, the federal parliament reconvened to pass an energy relief package.
However, direct energy bill relief won't arrive until the second quarter of 2023.
It's not clear just yet what relief will look like state by state but it's expected that price caps on coal and gas will have a cooling effect on prices and prevent them from getting as bad as they could get.
Lowering your gas costs
There are a few ways to start immediately saving on your gas bill:
- Compare gas plans. Depending on which state you live in the difference between the cheapest and most expensive gas plan on offer could be a few hundred dollars or up to nearly $2,000 proving just how important it is to compare your options at least once every 12 months.
- Find a fixed-rate plan. When signing up for a new plan look out for those that offer a fixed rate. This will mean your plan prices are locked for 12 months when you sign up and you'll be protected from the next gas price increase.
- Take shorter showers. If you're using a gas hot water heater you'll end up saving on your water bill and your gas bill at the same time.
- Skip preheating your oven. Unless you're cooking something where you need a very specific temperature it's likely just not worth preheating your oven. Most gas ovens reach cooking temperatures very quickly.
- Go all electric. Climate Council's Switch and Save report found that households could save on their energy bill by converting heating and hot water systems from gas over to electricity. Savings vary state by state with Tasmanian households potentially saving nearly $2,000 a year and Western Australian households saving the least at $800 a year – not an insignificant amount.
Ready to search for a cheaper gas plan? See our guide to cheap energy plans and start comparing your options.
