Pressure on household gas prices is set to ease and prices could fall after Australian commercial giant Wesfarmers today revealed it was muscling into the domestic gas market.
Claiming the move could cut a typical household gas bill by 10 per cent a year, Wesfarmers subsidiary Kleenheat said it was from today entering a market that supplies about 630,000 residential and small business customers.
The market covers an area from Geraldton in the north to Busselton in the south and could include Albany within years if the Barnett Government pushes ahead with its plan for a gas pipeline from Bunbury to the southern port town.
Kleenheat’s decision means consumers will now have a choice of supplier other than Alinta, which has had a monopoly of the market since it was established as part of privatisation efforts under the Court Government.
According to Kleenheat’s general manager of natural gas, Mark Gadsby, the WA-based company was hoping to provide services at a cheaper rate than Alinta by minimising costs.
Under the strategy Kleenheat would require customers to register an account online, subscribe to direct debit payments and sign on for a fixed two-year term.
“As a WA company, we think this is an important day for consumers – we’re bringing competition and discounted pricing to the residential natural gas market,” Mr Gadsby said.
“From today, Kleenheat Gas can supply existing Alinta customers from Geraldton to Busselton, including Perth, with the same natural gas from the North West, delivered through the same pipes and meters at your home.
“The big difference is that we’re offering a 10 per discount off the standard tariff for residential natural gas usage under our Monthly Smart Saver plan.”
Despite his optimism, Mr Gadsby conceded Kleenheat’s plans depended on whether it could poach consumers from Alinta, while it would also rely on the Government lifting gas tariffs in future.
The State’s Energy Minister sets domestic gas prices under current arrangements – an issue that has been a sore point in relations between the Government and Alinta in recent years.
Mr Gadsby acknowledged the Government’s role in the situation but declined to comment on whether prices should be set independently of the political process.