Electricity prices will increase by 5.3 per cent on Wednesday, which the Labor Opposition criticised as being higher than the Northern Territory’s current inflation rate.

Treasurer Bill Yan told the Estimates hearings the price rise was driven by an increase in the consumer price index, which he said had been triggered by the conflict in the Middle East.

“Our tariffs are adjusted annually, and they are adjusted in line with those CPI figures,” Mr Yan said.

“We have seen our adjustment for this year, which is slightly above CPI, if my memory serves me, which was a 5.3 per cent increase in regulated tariffs to commence from July 1.

“We have seen an anomaly due to the conflict in the Middle East at this current time, that has caused this bump in CPI. It is very hard to immediately match a wage growth to that initial spike in CPI, but we do see that projections are – not just by us, but also the Commonwealth – that we will see CPI then reducing to normal levels post 2026–27.

“On the modelling and projections that we have, we start to see a reduction back down to around 3 per cent, or even lower than that in the outer years with 2027–28 down to 1 per cent and 2.5 per cent in 2028–29.”

Mr Yan said there was also a 25 per cent rise in the NT government’s contribution to community service obligations, which help subsidise electricity bills for users, will increase from $167 million to $225.1 million by 2026-27.

“The CSO offsets are quite a large proportion of that cost, between a $1600 and $2500 subsidy to households. There are increases in generation costs for TGen delivery of power, water and sewerage services through Power and Water Corporation. These costs have to be passed on.”

Opposition leader Selena Uibo said the increase exceeds the NT’s current annual inflation rate of 4.2 per cent and the projected wage growth of 2.6 per cent, and would significantly strain household savings for families across the Territory.

“In Darwin, the CPI rose 4.2 per cent in a year ending March 2026… If wages grew by only 2.3 per cent, do you accept the fact that the budget is squeezing savings for Territory families and not necessarily supporting them?” Ms Uibo said.