NSW set for modest gas price hike

Gas prices in NSW will creep up by about 0.9 per cent in the next financial year if a proposal by the independent regulator is adopted.

The Independent Pricing and Regulatory Tribunal (IPART) released its draft decision on average regulated retail gas prices for 2016-17 on Tuesday and says the proposed rise is below inflation.

IPART says the proposed rise represents an increase of around $6 to $14 per year for most residential customers who haven't signed market contracts.

AGL customers on regulated contracts can expect to pay about $9 per year more for their gas next financial year.

IPART chairman Dr Peter Boxall said the proposed price was based on submissions from gas retailers and reflected an increase in their costs.

After dipping on average 3.9 per cent last year, gas prices had plateaued out as upward pressure from wholesale costs eased, he said.

"It's going up by 0.9 per cent which is less than the rate of inflation, so its a fairly modest increase," Dr Boxall told AAP.

"The main reason it's going up is because of an increase in the standard retailers' costs, most of which are going up by inflation or less."

The price change will only affect the 20 per cent of household and small business customers who have not signed market contracts and remain on a standard agreement with regulated gas prices.

IPART's final report is due in June and the new prices will take effect on July 1.