Business and Financial News

The state’s gas retailer says slugging households with a 10 per cent increase on gas bills is a “bandaid solution” to cover up the state government’s mismanagement of the energy sector.

But Premier Colin Barnett says it could have been worse, with the Office of Energy recommending an increase of 30.2 per cent by the beginning of 2012.

The 10 per cent rise, which comes into effect on August 1, will add about $1 a week to the average household gas bill during the next financial year.

The gas price hikes for households came about due to higher wholesale gas prices which are determined by the independent Economic Regulation Authority.

However, Alinta Gas chief executive Jeff Dimery says Mr Barnett is sweeping the issue of rising energy prices in WA under the rug, which will cost consumers in the long run.

Mr Dimery said that under Mr Barnett’s watch, there had been significant increases in upstream gas costs and network charges but Alinta had been denied the ability to recover those cost increases.

“Unfortunately, it is a case of shutting the gate after the horse has bolted,” Mr Dimery said.

“If only the premier had been this decisive and intervened before allowing gas network charges to increase by 27 per cent from 1 July or sitting idle whilst an independent arbitrator decided the wholesale gas price to consumers should also be allowed to double.”

However, Mr Barnett said he ignored the Office of Energy’s recommendation of a 30.2 per cent increase because it was too high and he did not want WA households to “have to bear a heavier burden than necessary”.

“The government is conscious that the rising cost of living is hurting people and we are doing all we can to try and minimise increases in utility costs,” he said.

Mr Barnett said the government would continue to provide assistance to those struggling with cost of living pressures through schemes such as the Hardship Utilities Grants Scheme, the State Energy Rebate and the Seniors’ Cost of Living Rebate. Full Article…