Canberra: The Australian Energy Regulator (AER) on Thursday announced a final price increase from July, citing that the ongoing Russia-Ukraine war has put “significant” pressure on global coal and gas prices.
The starkest price increases will come for residents in the state of New South Wales (NSW), where electricity prices will surge by 8.2 per cent adjusted for inflation and by 5.5 per cent for those in Queensland, reports Xinhua news agency.
This means that the average resident in NSW capital Sydney would be paying around A$100 ($70) more on electricity each year, adding even more pressure on residents being squeezed by a headline inflation of projected 5.5 per cent.
The AER report cited a compounding of factors leading to the surge, including included both domestic production outages and extreme weather in NSW and Queensland, coupled with international conditions.
“Factors contributing to increases in the draft forecasts included a reduction in thermal generation resulting from unplanned outages and higher coal and gas costs, slowing of investment in new capacity, and increasingly ‘peaky’ demand,” said the report.
“These conditions have persisted and been compounded by the ongoing war in Ukraine, which has led to significant pressure on coal and gas prices globally.”
The AER sets Australia’s Default Market Offer (DMO), the maximum price that private energy retailers can charge consumers.
Following the announcement, the peak body for energy retailers and generators the Australian Energy Council (AEC) urged consumers to shop around to soften price shocks.
“An increase to the DMO is news that most of us could have done without. No one likes to see prices rise, and with the current cost of living pressures, it’s important that consumers shop around for the best deal,” said AEC Chief Executive Sarah McNamara.
“Default offers are not the cheapest deal out there, they exist for customers who aren’t shopping around for a better energy deal,” she added.