Gas

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Our role in gas

Most residential and small business gas customers in NSW pay unregulated retail prices, which are set by the competitive market.

However, for the 20% of customers that have not taken up a market contract, IPART determines the maximum retail price.  These customers are supplied by the standard retailer in their area (AGL, ActewAGL or Origin Energy).  In July 2016, the average regulated retail gas prices increased by 0.3% (including inflation).

From 1 July 2017, prices will be deregulated, so IPART will no longer set the maximum retail price.

We also make recommendations to the NSW Government on gas reticulation licences and we monitor and enforce compliance with licence conditions.

Why gas costs what it does

In NSW, about 25% of the typical gas bill covers the cost of extracting and producing gas. The majority of the gas supplied to small consumers in NSW is natural gas sourced from domestic conventional gas fields.

Once the retailer has bought the gas you need, it is transported to your home or business through transmission and distribution pipelines. The retailer pays the gas transmission and distribution businesses for the amount of gas that they deliver via their pipelines. This makes up about 55% of your final bill.

Making all of this happen and managing your account costs the retailer money as well, so 20% of your bill covers their costs.

On your gas bill you’ll see fixed supply charges and usage charges. The fixed charge includes some of the costs of pipeline and retail operations. The usage charge is based on how much gas you use. This usage charge generally includes the costs of gas extraction and production, transmission and distribution costs, and retail costs. The amount you pay for these elements increases as you use more gas.

How gas prices are set

All NSW consumers can choose standard supply contracts with regulated prices for gas, or enter into a market contract offered by a licenced gas retailer. regulated gas prices are available to all residential and small business NSW consumers through regulated suppliers

Gas retailers (including the regulated suppliers) compete with each other to offer consumers a variety of prices, fees, terms and conditions under market contracts

IPART sets the average regulated prices upon request from the NSW Government by assessing price proposals from the regulated suppliers for each area.

AGL covers 80% of NSW including Sydney, Wollongong, Newcastle, Dubbo, Orange, Parkes, and parts of Riverina region.

ActewAGL covers regions around the NSW/ACT border (including Young, Goulburn, and Yass) and South East NSW (including Shoalhaven).

Origin Energy (Wagga Wagga) covers South Western regions of NSW including Wagga Wagga and Gundagai, and inland cities such as Tamworth.

Origin Energy (Albury) covers NSW/Victorian border including Albury and Murray Valley towns.

The maximum prices for each of the regulated suppliers are different depending on the costs they face in servicing their different geographic regions. In particular, the largest component of bills the network (distribution pipelines) charges ­ differs between areas.

Find out about the current regulated prices in your area.

Market prices are set by energy retailers in the same way many other businesses determine the prices they charge, considering the costs of providing the service and the need to be competitive.

Retailers market their offers to the consumers who can choose the offer they want according to their own needs, entering into a contract agreement with their existing retailer or a new retailer. The prices, fees, and other terms of these contracts are not regulated, and may be lower or higher than the regulated prices.

The Australian Energy Regulator (AER) provides a free online gas and electricity price comparison service ­to help consumers compare the regulated prices with offers from different gas retailers, and see the estimated impact of changing from regulated prices to different offers on their gas bills.

Subject to the terms of any contact, small consumers can return to the regulated prices at any time. 

 
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