The hikes recommended by the state pricing regulator, IPART, on Wednesday have been met with alarm by consumer groups, which have warned that households can ill afford new costs after years of spiralling electricity prices.

Business groups, whose members face even bigger increases, say jobs are at risk.

The increases are on average about 7 per cent lower than those originally sought by AGL Energy and Origin Energy. But they represent a hefty annual ramp-up of 17.6 per cent – the third straight year of rises in regulated prices.

IPART chairman Peter Boxall blamed the increases on rising wholesale prices as the eastern states are linked to the Asian market through new LNG export plants in Queensland. The first of the three projects in Gladstone, worth $70 billion in total, is due to begin shipping gas to China later this year.

“The ability to export liquid natural gas is driving a structural change in eastern Australia's wholesale gas market, and increasingly domestic gas prices will be influenced by what is happening in world gas markets,” Dr Boxall said.

In February, AGL and Origin pushed for price hikes of up to 20 per cent from July 1. While the increases apply only to the less than 25 per cent of small customers that have not signed up for a competitive contract, they signal that prices on market contracts will also be moving north.

An AGL spokeswoman pointed out that the 16.9 per cent average increase that its customers would experience from mid-year included the carbon price.

“If the carbon price is removed from July 1, 2014, the increase will be 11.3 per cent instead ,” she said. “This means a typical residential customer using 23 gigajoules of gas a year will face an average bill increase of about $2 per week, including GST.”

The Australian Petroleum Production and Exploration Association, an industry group, said the ruling highlighted the urgent need for more gas exploration and production in NSW.

The recent surge in power prices has already left an increasing number of NSW households, not just low-income and vulnerable consumers, struggling with their energy costs and having to make other sacrifices to pay their bills, said Oliver Derum, senior policy officer at the Public Interest Advocacy Centre.

“Not all consumers do have gas but those that do rely on it for things that are very strongly related to comfort and standard of living, such as heating space and water,” Mr Derum said.

Australian Industry Group NSW director Mark Goodsell said on Wednesday that industrial gas users in the eastern states face a doubling or tripling of wholesale prices, with the impacts to be felt throughout the chemicals, fertilisers, food processing and other sectors.

“Some businesses will be able to pass on their costs to households and other customers, but trade-exposed businesses won't,” Mr Goodsell said.

Greens mining spokesman Jeremy Buckingham called for government intervention to quarantine some gas for local use.

“No other country in the world would allow its households and manufacturing to be crippled by unrestricted gas exports,” Mr Buckingham said. “Australian governments can no longer just leave it to the market, because the market is failing the national interest.”

Phil Laird, national co-ordinator for the Lock the Gate Alliance, one of the fiercest opponents to CSG development in the eastern states, said: “It is a terrible outcome for regional communities, who not only have to deal with the damage to land and water from dangerous CSG mining, but now face escalating gas prices in a bitter double blow."

The regulator is due to release its final ruling on gas price increases in June.