As Australia heads into winter and people switch on their heating, energy costs have spiked due to surging demand, leaving smaller electricity retailers unable to weather price shocks.
Peak national employer organisation, the Australian Industry Group (Ai Group), referred to the rises in energy prices as “apocalyptic” on Tuesday, Xinhua news agency reported.
“Apocalyptic rises in energy prices threaten chaos for industry and pain for households. They demand a national, integrated and strategic response,” said Chief Executive of Ai Group Innes Willox.
“The extraordinary price rises, including a 50-fold spike in wholesale gas prices in (the Australian state of) Victoria,” said Willox.
He added that the spike in prices was a combination of outages at local coal plants and international coal and gas shortages driven by the Russia-Ukraine conflict.
As a result of the sudden price fluctuation, Australia’s peak energy regulator, the Australian Energy Market Operator (AEMO), has put a cap on price increases.
This has left smaller companies like Queensland retail budget supplier, ReAmped Energy, unable to absorb costs and with no option but to send customers away.
On Wednesday ReAmped Energy CEO Luke Blincoe urged customers to switch to larger retailers as soon as possible.
“The truth is that the more customers we have, the higher our prices will need to go… staying with us could mean your prices have to double soon,” said Blincoe.
Willox said any solutions to the current price pain would not be simple, and noted that Australia’s reliance on foreign commodities, which once had diversified Australia’s energy needs, was now making it vulnerable to international conditions.
“The most sensible steps on both the supply and demand sides to build for the future and reduce our exposure to fuel costs will take time to deliver. Short-term responses to help vulnerable industry and households will also be needed.”
Over the past week, Australia’s state governments have issued varying support payments for residents struggling to pay their energy bills.