A report released yesterday by think-tank the Grattan Institute, Gas at the Crossroads — Australia’s hard Choice, says the country is facing “energy bill shocks for households” over the next two years.

“Huge changes in the gas market will push up prices even more sharply, adding more than $300 a year to the average household gas bill in Melbourne,” the report said. 

The gas lobby was quick to leap on the findings as it pressures the state government to remove a ban on fracking and onshore gas drilling.

Australian Petroleum Production and Exploration Association chief executive David Byers called on the governments to “allow for the responsible exploration and production of natural gas in NSW and Victoria to secure supply and put downward pressure on rising prices”.

There are four companies in the south-west looking to tap into onshore reserves in the Otway basin, which spans the region and south-east South Australia.

Lakes Oil, which has several permits around Warrnambool, says its gas search has been held up by the government’s moratorium.

“In the Otway basin, planning and preparation for the drilling of a conventional well ... has been delayed due to the drilling ban,” the report said. 

“This has severely impacted on Lakes Oil’s ability to conduct operational activities across the state and sends a very negative message to all industry in Victoria.”

The Grattan report also said the Victorian government’s decision to spend millions connecting country towns including Terang to natural gas could be a waste of time for consumers. 

“People in regional Victoria may initially welcome the option of connecting to natural gas. With the predicted increase in gas prices, however, households in regional areas may well be better off from continuing to use other fuel sources, rather than connecting to the gas network,” the report said.