Higher gas prices in your home? Global gas looks unpredictable right now

Natural gas being used for cooking in the home

Natural gas is used by many Australians around the home for cooking, heating and preparing water. As a major part of your energy bill, it's important to keep an eye on what might be affecting the bottom line, especially as prices could be creeping up. Conflict in Europe has led to further speculation over the future of gas prices in Australia.

In Europe and Asia the disruption to normal supply has meant that the price for natural gas has skyrocketed to record-breaking levels. Gas has become increasingly expensive for both domestic and industrial uses.

The ACCC has revealed that Australian wholesale gas prices have also crept up from their 2021 level, with the price moving from $6-8/GJ to $10-11/GJ in 2022. This is still far below the international prices occurring in Europe and Asia. The consumer watchdog’s latest yearly report looks at trends and accounts for industry data to forecast the picture for the coming year.

What affects the price of gas in Australia?

After initially predicting that some parts of the country would see a shortfall of natural gas, the ACCC has changed it’s forecasts. In the last week, the Commission said that gas supply levels in the southern states will be better than they initially thought, meaning that less gas will need to be diverted from Queensland to the rest of the country.

If domestic supply holds steady in Australia, it is unlikely that the country will be affected to the same degree as Europe and Asia by the price spikes. 

But because of the way the global export market for gas works, if the international spot-prices continue to rise, this could slowly bring the Australian price up with it. A lot of Queensland's natural gas supplies are exported to the international market, so if less of this is diverted to the southern states it might help insulate Australia from the shocks in the global market.

What does this all mean for your gas bill?

If Australian gas producers compete in a tighter global market, they could pass the costs onto your bill. The Australian Energy Market Operator (AEMO) is expected to release its 2022 forecast for gas supply later this month, which will hopefully give a clearer picture of the gas situation in Australia.

In the meantime, comparing gas providers could be one of the best ways for you to get the best prices on gas. Now might be a good time to investigate the contract type that supplies your gas, exit fees or locked in contract terms might not be ideal in a gas economy that is potentially quite variable in the future.

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