Gas going to go up for industrial users: AGL

Industrial-scale gas users will face 50 per cent increases on current prices in 2016, says supplier AGL.

Industrial-scale gas users will face 50 per cent increases on current prices in 2016, says supplier AGL.

Fairfax reports that AGL has started telling its commercial clients that gas prices per gigajoule will increase from the $6 mark in 2014 to $9 in 2016, with supply costs rising by 20 per cent in 2017.

Many of AGL’s long-term contracts end in the coming year, with prices exposed to jumps in prices asked by those operating gas fields.

'We see significant price hikes for business contract gas rates over the next four years,'' the chairman of Energy Action, Ron Watts, told Fairfax.

''It's hard to imagine increases in supply affecting this trend within four years, even if there was a favourable CSG [coal seam gas] environment.''

Late last month AGL Energy’s CEO Michael Fraser told The Australian that the company was spending millions in arbitration against NSW and Victorian suppliers increasing their prices this year, when major Queensland projects don’t come on line until next year or 2015.

“Those markets are well supplied with gas and there is no reason for prices to step up," he said.

Manufacturers have been expressing concern about rising input prices, with CSR citing energy costs in their decision to restructure their Viridian glass business earlier in the week, making 150 positions redundant.

Garbis Simonian from Weston Aluminium described the coming AGL price rises as ridiculous.
''We can't pass that cost on to our customers – we couldn't even pass on the carbon tax,'' he said. ''We've had to wear that cost rise,” he said.