Gas company AGL has applied for a hike in the regulated gas tariff that could see average household gas bills climb to as much as $1136 a year.

AGL applied to the Independent Pricing and Regulatory Tribunal for the 20.3 per cent hike citing surging wholesale prices due to the planned export of large volumes of gas from Queensland.

The company said the planned export of gas from Queensland is forcing the wholesale gas price to about $6 to $7 a gigajoule, up from $4.70 at present.

Already, the price in Queensland is estimated at about $9.40 a gigajoule.

The surge in the Queensland gas price is forcing gas retailers to look to obtaining increasing volumes of gas from Bass Strait suppliers, where the wholesale price is put at about $6.25 to $6.50 a gigajoule.

But supplies from Victoria are constrained by a lack of pipeline capacity.

“Retail gas prices are a greater challenge as NSW only produces around five per cent of its own gas,” Mr Roberts said.

“This means consumers must pay prices that are being driven higher by increasing Australian demand for gas, a lack of alternative local supplies and the existence of attractive export contracts available to interstate suppliers of gas to NSW.

“The State’s yearly demand for gas is 161 petajoules (PJ) but NSW only supplies 5.4PJ (or enough for 234,782 homes) which means we are at the mercy of gas market prices.

“This is why the NSW government is working with communities and the industry to establish a safe and environmentally sustainable gas supply for NSW residents, businesses and manufacturers.” 

But Greens MP Jeremy Buckingham said Mr Roberts was running a scare campaign based on industry lies to justify turning NSW into a toxic gas field.

“The idea that NSW must industrialise our agricultural land and threaten our water resources in response to looming gas price hikes is simply not true,” he said.

“The reason that the price of gas to Australian consumers is set to rise is because the government is rushing to export liquid natural gas and this is increasing demand and driving up prices.

“Instead of allowing key farmland and environmental assets to be contaminated by coal seam gas drilling to feed overseas demand we should assess whether any exports are in the national interest.”