The NSW government is set to announce a strategy to drive down gas prices amid fears of a sharp spike in prices driven by Australia's growing export industry.
State energy and resources minister Anthony Roberts said the government's gas strategy was yet to be finalised, but the industry needed to be more open about how the export market would affect domestic prices.
Analysis by independent think tank the Grattan Institute found that annual gas bills could jump by as much as $435 in the eastern states because of economic pressures created by the $14.5 billion gas export market, which is predicted to quadruple over the next four years.
Mr Roberts supports a federal government call for the Productivity Commission or the Australian Competition and Consumer Commission to examine the lack of transparency in the east coast gas market.
"If you can't measure, you can't manage," he said. "Given NSW imports 95 per cent of our gas, greater transparency is critical."
The forecast price rise could be mitigated by increasing supply through expanding through expanding the coal-seam gas sector.
"The NSW government is committed to putting downward pressure on gas prices," he said. "We are committed to increasing our domestic supply of gas, which will assist in putting downward pressure on prices, in a safe and sustainable way."
The state opposition supports reserving a portion of gas for domestic use but says the the policy must be national as NSW produces such a small proportion of its gas needs.
Greens energy spokesman John Kaye said exporting gas was detrimental to the global environment and Australian economy.
"There's no question we need to stop the export of gas because all we're doing is exporting fuel that causes greenhouse-gas emissions and we're making life harder for ourselves in the process," he said.
"The Grattan Institute says 'just suck it up sweetheart and let the market rip and hope all will be well'. That's not appropriate because that's really going to hurt low-income households."
Rather than reserving a portion of gas for domestic use, Australians should focus on renewable energy.
"The problem with gas reservation is you're effectively subsiding a fossil fuel," Mr Kaye said. "We should be making the transition away from gas as quickly as possible, rather than protecting gas."
The peak national body representing Australia's oil and gas providers, the Australian Petroleum Production and Exploration Association, also rejected the idea of domestic gas reservation, saying the industry should be permitted to increase exploration and production, including coal-seam gas mining.
"Leadership is urgently required 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," APPEA chief executive David Byers said.
Australian Energy Market Operator said it would be premature to comment on the Grattan Institute's findings as it is conducting its own independent analysis on gas demand, supply, reserves and investment potential.
