(Bloomberg) -- Energy bills for Australian households and small businesses may fall from July, in a fillip for the government that has been trying to relieve cost-of-living pressures driven by elevated inflation and high interest rates. 

The maximum price electricity providers can charge residential customers will decline as much as 7.1%, the Australian Energy Regulator said in a draft determination Tuesday. The changes are subject to consultation and stakeholder feedback, with a final decision due in May.

Energy bills soared in Australia after international prices for coal — which still provides most of the nation’s electricity — surged in the wake of Russia’s invasion of Ukraine in 2022. The government has since capped domestic gas and coal prices, pledged billions in energy bill relief and set an ambitious target to increase renewable generation to 82% of the total by 2030. 

It has signaled further cost-of-living relief in the May budget.

“Today’s figures show a welcome downward trend for prices following the biggest global energy crisis since the 1970s,” Energy Minister Chris Bowen said. “But we know there’s more to do to get cheaper energy in the grid for Aussie families and businesses.” 

In conjunction with the rise in energy prices, inflation surged in the post-pandemic period, prompting Australia’s central bank to raise rates to a 12-year high of 4.35% to restrain prices. It’s expected to keep the cash rate unchanged when it announces its decision later Tuesday. 

©2024 Bloomberg L.P.