Prime Minister Anthony Albanese has denied looming energy price rises are an embarrassment for the government, despite describing the price hike as significant.
The Australian Energy Regulator released its draft default market offer decision on Wednesday for the upcoming financial year,showing a 25.4 per cent rise, or $1738 a year more, from July 1.
The default market offer represents the maximum price energy retailers can charge residential and small business customers in NSW, South Australia and southeast Queensland.
The final decision on what the offers will look like will be made in May.
Mr Albanese said the price hikes would be even higher were it not for government intervention in the market.
However, he said Australia was not alone in experiencing rising energy costs.
"The bottom line is there's been a war in Ukraine that has put up global power prices. And because of our energy market and the way that it works, that has an impact on Australian prices as well," he told Melbourne radio station 3AW on Thursday.
"(The price hike) is very significant, and that's why we intervened in the market in December - the increase would have been far greater."
The intervention in the market saw the government cap the price of coal and gas, with money to also be set aside for energy bill relief measures.
The government has flagged relief in the federal budget - to be handed down in May - through rebates it is negotiating with the states and territories.
When asked if the price rises were embarrassing given election promises to lower energy bills, Mr Albanese denied it was the case, pointing to the global spike in prices.
"Australia is not immune from global economic trends. And indeed, inflation in Australia is less than it is in Europe or the United States."
Deputy Liberal leader Sussan Ley said the government was presiding over a cost of living crisis.
The head of the peak body representing small businesses, COSBOA, told AAP owners would have to significantly manage costs in the upcoming months.
"Many small businesses are individuals in business, mum and dad businesses or family enterprises with one or two employees," chair Matthew Addison said.
"If energy becomes more expensive again then typically business owners work harder and are paid less. Many will consider closing."
Australian Chamber of Commerce and Industry chief Andrew McKellar said the forecast energy price spike was a "hammer blow" to small businesses already facing increasing input costs.
He urged accelerated investment in renewable energy generation, storage and transmission to keep up with growing energy demands.
"A long-term solution focused on boosting production is absolutely essential to bring stability to the energy market," he said.
