IPART released its draft report on regulated gas prices in NSW yesterday.

The price rises it has mooted will affect small gas customers - those who consume fewer than 1000 gigajoules a year - who remain on regulated prices after July 1.

IPART said more than 75% of small gas customers were no longer on regulated prices and had instead chosen to enter into a market contract with a gas retailer.

For those still on regulated gas prices and a "typical" AGL or ActewAGL customer, that means an increase of $741 and $875 respectively over the two years.

IPART says the main driver for price increases is "structural changes in the wholesale gas market, including increased exposure to the international gas market".

In other words, it lays the blame at the feet of the LNG exporters in Queensland that want to sell their gas, which had been going to NSW, at an international price.

The Australian Petroleum Production & Exploration Association says NSW should be concentrating on its own domestic gas reserves rather than worrying about the gas to be shipped out.

"Australia's second biggest onshore natural gas field is within NSW borders yet 95% of the state's natural gas supply is imported from other states," APPEA said.

"This is despite indigenous reserves that would fulfil the state's natural gas needs for the next 20 years and potential resources that could supply NSW with a cleaner burning energy source well into the next century.

"APPEA has long argued that downward pressure cannot be applied to rising gas prices if restrictions on developing natural gas from coal seams in SNW are allowed to continue.

"Just last year IPART identified the development of NSW gas as one of the most effective ways to put downward pressure on prices.

"Developing NSW gas reserves would also increase employment and economic activity in NSW, as has been the experience in Queensland."