Australian consumers are expected to face even more fines if ‘apocalyptic’ price jumps continue.
The highest inflation in two decades — with gas prices at $2 a liter and $12 on iceberg lettuce — is far from the only challenge facing everyday shoppers.
Soaring electricity prices will cause further pain as an ‘extraordinary’ rise in natural gas prices makes goods even more expensive – exacerbating the supply chain crisis.
A key coal-fired power plant is expected to stall for a few more months as coal prices are now at all-time highs despite a policy focus on green energy.
Inflation data from the Australian Bureau of Statistics showed a massive 13.7 per cent rise in transport costs, with petrol prices rising at the fastest pace since 1990 when Iraq invaded Kuwait.
Fruit and vegetable prices rose 6.7 percent through March as flooding along Australia’s east coast hampered fresh food supplies.
Even after these official numbers were compiled, a salad cost $11.99 in a Brisbane supermarket.
Meat and seafood prices have already risen by 6.2 percent.
Australian consumers are expected to face even more fanny pack penalties as the ‘apocalyptic’ supply chain crisis worsens (pictured are shoppers at Pitt Street Mall in Sydney).
To stem the rise in costs, Prime Minister Anthony Albanese has already backed a 5.1 per cent wage increase for Australia’s lowest paid 2.7 million workers – or about 20 per cent of Australia’s 13.4 million workers who earn the minimum wage or an award , which reflects this.
The Australian Council of Trade Unions wants minimum-wage workers to get a 5.5 percent wage increase on July 1.
In a revised submission to Fair Work Australia, unions argued that a wage increase above headline inflation of 5.1 per cent was justified.
But the Australian Industry Group is pushing for a smaller 2.5 per cent increase, arguing producers are now facing a “50-fold increase” in wholesale gas prices in Victoria.
Employers’ group chief executive Innes Willox warned that “extraordinary price increases” for natural gas would result in consumers paying even more for goods.
“Apocalyptic surges in energy prices threaten chaos for industry and pain for households,” he said.
The average daily weighted gas price in Victoria was $9.48 per gigajoule in the March quarter, almost triple the level a decade ago, data from Australia’s Energy Regulatory Agency showed.
But on Monday, the Australian energy market operator in Victoria imposed a temporary price cap of $40 per gigajoule after spot prices rose to a staggering $382 per gigajoule.
AGL’s Loy Yang A coal-fired power plant in the La Trobe Valley has been shut down since April and is operating at significantly reduced capacity.
The Loy Yang stations in Traralgon had supplied about 30 percent of Victoria’s energy needs.
Australian Industry Group’s chief national adviser, Tennant Reed, said this has caused natural gas prices to rise.
“These are very strange times. Prices have gone crazy,” he told Daily Mail Australia.
The highest inflation in two decades – with petrol prices at $2 a liter and $12 of lettuce – is far from the only challenge for everyday shoppers (pictured is a social media image of iceberg lettuce in Brisbane).
The AGL coal-fired power plant is due to be shut down by August, adding further pressure on manufacturers who rely on gas.
“We are still stuffed with energy costs by historical standards. They will be very high,’ said Mr. Reed.
Mr Willox said Russia’s invasion of Ukraine, which has already pushed up global crude prices, would put more pressure on natural gas and coal prices as Europe tried to wean itself off Russian gas.
The spot price of coal is now above $400 a ton for the first time.
“Behind these acute pressures lies the pull of international coal and gas prices, which are at unprecedented levels following the Ukraine invasion,” Willox said.
‘As Europe today announces further steps to wean itself off Russian energy, we can expect international factors to maintain high energy price pressures for years to come – particularly for natural gas.’
In the past year alone, wholesale electricity prices have more than doubled, rising 141 percent to $87 by March, data from Australia’s energy market operator shows.
Wholesale prices make up about 30 percent of an electricity bill, meaning consumers can expect price increases from July 1.
In Sydney, average unleaded petrol prices are back above $2 a liter this week.
And that’s despite a six-month fuel tax halving to 22.1 cents a liter in the March 29 budget.
In Sydney, average unleaded petrol prices are back above $2 a liter this week. And that’s despite a six-month fuel tax halving to 22.1 cents a liter in the March 29 budget
But the Australian Industry Group is pushing for a smaller 2.5 per cent increase, arguing that producers are now grappling with a 50-fold increase in wholesale gas prices in Victoria. CEO Innes Willox warned that with higher energy prices, consumers would pay even more for goods
Treasurer Jim Chalmers, through his advisers, has told the Daily Mail Australia that the temporary excise duty cut is unlikely to be extended when it expires in September.
Truck drivers are angry because the cut in the fuel consumption tax only reduced diesel bills by 4.3 cents per liter.
Borrowers face even more misery as Westpac expects the Reserve Bank of Australia to hike interest rates seven more times in the coming year.
That would see the RBA cash rate rise to 2.25 percent by May 2023 for the first time in eight years.
A borrower paying off a $600,000 mortgage would see their monthly payments increase by $713 compared to May 2022 before the rate hike.
They would owe $3,019 a month, up from $2,306 just a month ago before the RBA hiked rates this month for the first time since November 2010, ending an era of a record-low 0.1 percent cash rate.
In the past year alone, wholesale electricity prices have more than doubled, rising 141 percent to $87 by March, data from Australia’s energy market operator shows
At the beginning of May, interest rates were raised by a quarter of a percentage point to 0.35 percent.
The RBA hiked interest rates during an election campaign after official data showed the consumer price index rose 5.1 percent in the year to March – the fastest pace since mid-2001, after the GST was introduced.
However, some items rose even faster than inflation.
