Babcock & Brown Power (BBP) said the Western Australian government confirmed on Friday afternoon that it would increase the cap on gas tariffs for residential and small business customers from 1 July 2008. The Babcock & Brown Limited (BNB) spin-off said these increases would be between 5.4% and 16.5%, with larger users hit hardest.
The tariff increases were brought about as a result of the WA office of energy recently undertaking a review of gas tariffs, with the help of BBP owned Alinta.
"Alinta, the largest retailer of natural gas in WA, worked closely with the office of energy during the review process to help establish a fair and reasonable tariff increase," BBP said in a statement.
"The tariff increase reflected the cost of gas delivery, while being sensitive to the needs of householders and small businesses."
The major costs incurred by gas retailers are wholesale gas commodity charges, transportation charges, network charges and labour costs.
"Significant increases in these costs, particularly wholesale gas commodity, have had a substantial impact on the cost of delivering gas to consumers."
While Alinta couldn¡¯t rule out further increases in these costs going forward, it said it would be working closely with all market participants to keep these to a minimum.
"A smaller impact is possible if strong competition can occur amongst upstream gas producers," it said.
By 1049 AEST, shares in Babcock Power had advanced 2.5c to 64.5c
just wondering what will be the effect for gas producer?any ideas
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