Energy bills for Victorians have jumped with gas prices up 16 per cent despite companies offering bigger discounts, an Essential Services Commission report has found.
The Victorian Energy Market report released on Tuesday showed electricity prices also surged by five per cent in 2016-17.
Despite energy companies offering "bigger and bigger" discounts some customers were still struggling to pay their bills, the report found.
"In other words, bigger discounts don't necessarily mean cheaper bills," commission chair Dr Ron Ben-David said.
"As a result, the advertised discount rate is a poor measure of the amount a customer can expect to pay for their electricity or gas," he said.
Dr Ben-David said the combined impact of rising prices and bill shock from not meeting discount conditions sees many people struggling.
The increases in penalties for failing to keep up with discount conditions and steep price energy price rises was forcing many into hardship programs, the report shows.
The findings reinforce the need to push ahead with changes to energy rules to make sure customers struggling to pay bills received timely, flexible and meaningful assistance, the commission chair said.
Those rules will come into effect in January 2019.
