Victorian gas prices predicted to rise more than 26%: Is now the time to switch?

Households with natural gas in Victoria have been warned to brace for significant increases to their bills as wholesale costs leave retailers no choice but to hike up prices.

Several retailers, including big three provider EnergyAustralia, have told their Victorian customers to prepare for higher gas rates come February 2023 as companies combat increasing wholesale and operational costs.

EnergyAustralia told customers, both residential and business, that they could expect an increase of 27.3% on average come February 1, 2023 across its variable market contracts.

For about 245,000 residential customers, this will tack $480, or 26.7%, on average to their yearly bills. For 4,000 EnergyAustralia business gas customers this will look more like a 35.7% price rise on average.

Mark Brownfield, EnergyAustralia Chief Customer Officer said despite the recent government interventions, its wholesale gas contracts were still causing headaches around pricing and costs.

“Recent government actions are focused on the wholesale gas price for future contracts,” he said. “We supply customers from our existing wholesale gas contracts, some of which were contracted during 2022.”

In December, the federal government announced that it was implementing a temporary price cap on wholesale natural gas prices to help combat rising costs as part of its Energy Price Relief Plan.

This however, was introduced as an intervention for future gas contracts and would be unlikely to impact current contracts in place, many of which were signed during peak pricing spikes in 2022.

Mr Brownfield added: “We know the news of higher prices will not be easy for our customers however a perfect storm of factors in 2022, including the war in Ukraine and extreme weather events, pushed up wholesale gas prices.”

Alongside EnergyAustralia, Origin Energy and Alinta Energy have also issued price rise warnings for gas plans in Victoria come next month.

Any EnergyAustralia customers who are concerned by the incoming price hike are urged to reach out for further support and resources, Mr Brownfield said.

“EnergyAustralia recognises that some customers may be struggling. Our message is that we’re here to offer support. If any of our customers believe they will be unable to meet their energy costs because of this increase, we can help through payment plans, extensions, a staying-connected guarantee and access to cash flow assistance for small businesses.

“If you are an EnergyAustralia customer facing difficulty paying your next bill, please get in touch with us as early as possible so we can help.”

Is now the time to switch natural gas providers?

Rising prices can often serve as a pertinent reminder to compare rates in your area and ensure you are still getting a good deal on your natural gas plan.

According to a Canstar Blue survey conducted in December 2022, only 42% of Victorians felt they were getting a good deal for natural gas. Despite this, only 12% of households had made the effort to switch natural gas providers in the last two years.

The same survey also found that just over a quarter of Victorians (26%) had been with their current natural gas supplier for more than 10 years.

Tara Donnelly, Canstar Blue’s Utilities Editor, said often the best deals are awarded to new customers so regularly comparing prices could pay off.

“If you can’t remember the last time you compared natural gas rates in your area, then there is a good chance you could be paying too much for gas. Particularly if you are in Victoria, given the current climate of the energy market, if you haven’t had a look at gas prices in recent months, it might be time to see what’s out there.

“Some providers are still offering sign-up discounts or bill credits for new customers so it could be worth your bank to switch providers.”

According to the same Canstar Blue survey, of those Victorians that had switched gas providers in the last two years, just over half of them (52%) said it proved to be a good financial decision.

Who is the cheapest gas provider in Melbourne?

Currently, the cheapest natural gas provider in Melbourne is Origin Energy, according to the Canstar Blue database.

Its cheapest plan is its standard deal, Basic, which comes with variable rates on a no lock-in contract. Please note, this plan uses block rates for its usage and operates on a bi-monthly billing period. For estimated pricing, please see details below.

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