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WA’s only local chip manufacturer has warned it’ will be forced to increase prices following a gas price increase of almost half a million dollars.
Key points:
- The price of hot chips in WA is expected to rise after an energy bill increase of 60 per cent for a local manufacturer
- Energy Economist said the State is not exempt from the effects of global gas supply issues
- Gas suppliers say fuel costs are affecting the price they charge for LPG gas
WA Chip is the state’s only commercial chip manufacturer and is owned by Bendotti Exporters.
Bendotti Exporters non-executive chair Brian Piesse said the company’s gas bill was increasing by 60 per cent on the last contract period of two years.
“That’s [an additional] $400,000,” he said.
“Gas is a major cost of our production. So, we’ve had to announce another increase to reflect that.”
Like many businesses in the current climate, the company is also facing rising costs of other inputs like transport, packaging and potatoes.
“If [the gas price increase] had only been one part of our cost of production that had increased in the last 12 months or so, we could have probably worn part of it ourselves,” Mr Piesse said.
WA Chip supplies many of the state’s fish and chip shops with their potato chips and hotels.
Mr Piesse said it was unfortunate to put additional pressure on family-owned businesses further along in the supply chain by increasing their prices.
Is WA headed for the same path as the eastern states?
Curtin University energy economist Dr Robert Aguilera said he did not think WA was likely to experience an energy crisis as seen in the eastern states.
“[WA is] the big gas producer within the country. We have far greater reserves and production compared with the eastern states,” he said.
“And with existing production and all the new projects coming, we’ll be in better shape to be able to meet our domestic requirements, but also the export obligations.”
Dr Aguilera said any gas price pressures seen in WA were likely to be caused by global supply disruptions.
“Much of this can be explained by events going on around the world, in particular, the gas supply disruptions coming from Russia — given that that’s such a huge producer and exporter of natural gas.
“So, when there are shortages in one important region of the world, prices tend to go up everywhere, and we feel that here at home.”
Global events impact
Elgas said it endeavoured to limit the impact of price movements on our customers.
“However, recent global events have increased LPG pricing across Australia,” it said in a statement.
“This is due to an unprecedented surge in international LPG prices associated with the impact on global oil and gas supply arising from the Russian military action in Ukraine.
“Other costs, such as fuel required to transport LPG to homes and businesses, have also increased.”
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