The West

Price war keeps gas costs  in check
Counting the cost: A price war will keep gas costs in check. Picture: Steve Ferrier/The West Australian

WA households will be spared big increases in gas tariffs from July amid a price war between dominant retailer Alinta Energy and its rival, Wesfarmers-owned Kleenheat.

In a reprieve for consumers who have been hit with massive cost of living increases in recent years, Alinta said any rise in gas tariffs to its residential customers next year would be limited to inflation.

The remarks mean gas bills for a typical household will be unlikely to rise more than 2.7 per cent - or $16 - from the current rate of about $590 a year.

Under WA's regulated gas tariff structure for household customers, retailers such as Alinta must apply to the State Government for approval of price increases in excess of the current inflation rate.

Tariffs have risen more than 30 per cent since 2010 as Alinta sought to pass on the increasing price of gas caused by tightening supplies and higher network access costs.

But the entry of Wesfarmers subsidiary Kleenheat into the market in August last year has led to a major shake-up of the industry and sparked a competition war with Alinta.

There are about 630,000 household gas customers across Perth and the South West, and Kleenheat launched its bid for market share with a 10 per cent discount offer.

Energy Minister Mike Nahan said it was encouraging the retailers had not asked for big price rises this year and suggested competition was working.

"For a while there Alinta had to adjust to the large increase in price they had to negotiate with (gas supplier) the North West Shelf," he said. "Kleenheat's entry has forced them to match each other and forced them to moderate price rises."

An Alinta spokeswoman said the company had yet to decide exactly by how much prices would increase.

"Alinta Energy is conscious of cost-of-living pressures for WA residents," the spokeswoman said.

Kleenheat said it "expected" its entry into the market would have factored in the "significantly lower" rise consumers faced.

The West Australian

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