Gas in Victoria
Victoria has the highest residential gas usage of any Australian state, with most homes connected to mains gas for heating, hot water, and cooking. The state has full retail gas competition, with the same retailers that sell electricity (AGL, Origin, EnergyAustralia, Alinta, Red Energy, and others) also offering gas plans.
Victoria has three gas distribution networks: Australian Gas Networks (AGN) in the inner and outer west, Multinet Gas in the east, and AusNet Services in the outer north and parts of the CBD. Your network determines which retailers are available, though most major retailers serve all three networks.
Gas pricing in Victoria
Gas bills have two components: a daily supply charge (typically 60 to 90 cents per day) and a usage charge measured in megajoules (MJ). Usage rates typically range from 2.5 to 4.5 cents per MJ depending on your plan and how much you use. Some plans have declining block tariffs where the per-MJ rate drops the more you use, which benefits high-usage households with gas heating.
The ESC sets a Victorian Default Offer for gas (separate from the electricity VDO), which caps standing offer prices. As with electricity, the most competitive market offers sit well below the VDO.
Our take on gas in Victoria
Victoria is the state where the gas vs electric question is most pressing. Gas prices have risen significantly since 2022, and the economics of gas heating versus reverse cycle air conditioning have shifted. A modern reverse cycle system typically costs 30% to 50% less to run than a ducted gas heater, even in Melbourne winters. If your gas heater is more than 10 years old and needs replacing, run the numbers on going all-electric before committing to another gas appliance.
That said, if you have a functioning gas system, comparing gas plans can still save $100 to $250 per year. Many households are on expired plans paying the default offer rate without realising a competitive market offer could reduce their bill. Dual-fuel discounts (bundling gas and electricity with one retailer) sound appealing but do not always deliver the best total cost. Compare each fuel separately.
Compare gas plans at your address
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Compare gas plansShould you switch from gas to electric?
The case for electrification is strongest when your gas appliances are at end of life. Replacing a gas heater with a reverse cycle system, a gas hot water system with a heat pump, and a gas cooktop with induction typically costs $8,000 to $15,000 upfront but saves $600 to $1,200 per year on ongoing energy costs, with a payback period of 8 to 15 years. Victorian Government rebates through the Victorian Energy Upgrades (VEU) programme can reduce the upfront cost significantly.
If your gas appliances are relatively new and working well, the financial case for switching now is weaker. Continue comparing gas plans to minimise your gas costs while the appliances last, and plan for an all-electric replacement when they reach end of life.