Aussies may be energetic, but they’re paying for it. A new Australian Bureau of Statistics (ABS) survey found that the average household doles out $60 per week for petrol, and an additional $39 for gas and electricity at home.
In an interview with ABC news, ABS spokeswoman Stephanie Cornes noted that all households are not created equal. While Queenslanders get by on an average $93 per week for total energy costs, Northern Territory residents feel a $110 pinch.
In Oz, it pays to be hot. Cooler climates commonly incur high gas and electricity costs, while temperate areas get by with lower-than-average household energy use. The survey also points to energy use as an inferior good, meaning rich households don’t up energy use in proportion to their wealth. Instead, the study finds that while energy costs make up as little as 3% of high-income household earnings, low-income households commonly spend a full 10% of their income to keep their homes energized.
As an interesting note for utilities like Origin (ASX: ORG) and AGL Energy (ASX: AGK), more than 10% of low-income households responded that they have either had their electricity cut off and/or been unable to pay an energy bill on time in the past year. For utilities hoping to capitalize on enlarged customer bases and steady income, this relatively large portion of Aussies could represent lost revenue from prohibitively high prices.
With fuel costs clocking in even higher, the battle for cheap petrol is set to take centre stage in the coming years. Low switching costs will keep pure plays like Caltex (ASX: CTX) on the defensive as new entrants like Woolworths (ASX: WOW) and Westfarmers (ASX: WES) look to lure customers into their stores with break-even prices.
Energy use took a hit during the Global Financial Crisis, but consumption and prices are creeping back up, and investors will need to keep a close watch on where this sector heads. Energy is the backbone of an economy, and unnecessarily high prices might cushion costs for some energy companies, but could ultimately hinder Oz’s growth potential.
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Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.