The hospitality and agricultural industries are bracing for impact with electricity bills expected to surge by nearly 30 per cent next month.

The Queensland Competition Authority (QCA)'s latest report predicts a 26.8 per cent increase in electricity costs for small businesses in regional areas of the state from July 1.

Luke Johnston has owned and operated a restaurant in north Queensland for more than a decade.

He said electricity was one of his greatest expenses and he would be forced to pass on the cost to his customers.

"It's not something you'd like to do — it's just something that you have to do, unfortunately," he said.

"If the electricity goes up, it raises the cost of everything else … you're constantly chasing your tail.

"The chicken is going to go up, the seafood's going to go up, fruit and vegetables are going to go up, the refrigerated goods."

$10 for a cup of coffee?

Ergon is the only energy provider in regional Queensland, but some believe that needs to change to bring more competition to the regions.

In south-east Queensland, the Australian Energy Regulator has confirmed electricity prices will increase by 23.9 per cent at the start of the new financial year.

The QCA estimated the average annual bill for a typical residential household in regional Queensland would increase by 28.7 per cent.

Mr Johnston said cost-of-living pressures and drastic inflation meant dining out could become less affordable for his customers.

"In the last year it's around 20 per cent more expensive [to eat out at a restaurant]," he said.

"A $5 cup of coffee is now a $6 cup of coffee.

"What's scary about that is at some stage, it's going to get too much for somebody to afford to be able to go out and have bacon and eggs and a coffee."

He was concerned about the future of the hospitality industry in regional Queensland if nothing changed.

"It's pretty horrifying when you think that a little bit of extracted water through some roasted beans with some milk [could potentially cost] $10."

Small businesses under pressure

Michael Kopittke from the Townsville Chamber of Commerce said an increase in electricity would have a "major effect" on the hospitality industry.

"Cafes and restaurants have already been identified by the ATO as businesses in risk," he said.

"Disposable expenditure is the worst that it has been in Australia in 40 years.

"Many of these businesses have still not gotten to pre-COVID levels because of our skill shortages in regional Queensland.

The price increase will coincide with another anticipated wage increase at the start of July, which Mr Johnston said would increase his overheads.

"We still offer table service which puts us in a position where we're paying more labour than cafes where you order at the counter and take a number," he said.

"And we'd like to continue to operate in that way … that's a really big, important part of what we do."

The Queensland government announced in its 2023-2024 state budget, released on Tuesday, that it would offer a rebate of $650 on electricity bills for eligible small businesses.

Farmers to suffer too

Chair of Canegrowers, the peak body for Australian sugarcane growers, Owen Menkens said electricity was the highest cost for cane farmers outside of harvesting.

"It's very difficult to have a big increase like that, it's tough going.

"A lot of growers are looking at irrigation efficiencies to limit the effect of the price rise, but you can only do so much with regard to efficiency, at the end of the day you still have to pay the price."

Mr Menkens said raising the price of electricity was essentially a "tax" on farmers.

"It's not good for growers to pay extra and that money is essentially going back into central revenue."