The short answer
How to find the cheapest gas in Australia
Finding the cheapest gas sounds like it should be simple: pick the plan with the lowest cents per megajoule (c/MJ) and you are done. It is not, for two reasons most guides skip. First, every gas account pays a fixed daily supply charge on top of the usage rate, so the cheapest plan for a light user who only cooks can be a different plan than for a household that heats with gas all winter. Second, gas has no Default Market Offer or Victorian Default Offer, so there is no regulated reference price telling you whether an offer is fair, the way there is for electricity. This page explains how to actually compare gas plans, and answers the bigger question underneath, whether gas or electric is cheaper to run.
Here is the core takeaway in one line: the cheapest gas is the plan with the lowest total of the usage charge (your energy in megajoules times the c/MJ rate) plus the fixed daily supply charge for your actual usage, not the plan with the lowest advertised rate. That single mechanic explains why there is no universal "cheapest" plan: a light user who only cooks is dominated by the daily supply charge, while a household that heats with gas all winter is dominated by the usage rate, so the same two plans can rank in opposite orders for the two homes. And because gas has no regulated reference price, the gap between a sharp plan and a lazy one is wide, which is exactly why comparing on the total pays off.
Reframe the assumption: "cheapest gas" is not a single number on a single plan. It is the lowest yearly total for your usage, made of a usage rate and a daily supply charge that pull in different directions for light and heavy users. And the biggest saving may not be a cheaper gas plan at all: for heating and hot water, an efficient electric heat pump often costs less to run per unit of useful heat than gas.
The blind spot
Why most cheapest gas guides get it wrong
Most articles about finding the cheapest gas do one of three unhelpful things, and each one can send you to the wrong plan.
First, they rank plans by the advertised usage rate alone. They tell you to find the lowest cents per megajoule and stop there, ignoring the fixed daily supply charge that runs every day of the year. For a light user who only cooks with gas, that supply charge is most of the bill, so a plan with a sharp rate and a fat daily charge can quietly cost more than a plain-looking rival.
Second, they borrow the electricity playbook. They tell you to check whether your gas offer beats the reference price. Gas has no Default Market Offer and no Victorian Default Offer, so there is no regulated benchmark to check against. Advice that assumes a reference price exists leaves you with no way to judge whether a gas offer is actually fair.
Third, they never ask whether you should be buying gas at all. They compare gas plan against gas plan and skip the bigger question, whether an efficient electric appliance would cost less to run for the same heat. Because you cannot compare c/MJ to c/kWh by eye, that comparison gets dodged, and the genuinely cheapest option for heating or hot water goes unmentioned.
How the cheapest gas is actually decided
Expert analysis: what really makes one gas plan cheaper
The cheapest gas is the lowest total for your usage
This is the defining point. The cheapest plan is not the one with the lowest advertised usage rate; it is the one with the lowest total of the usage charge plus the daily supply charge for how much gas you actually burn. The usage charge is your energy in megajoules multiplied by a rate of about 3 to 5 c/MJ. The supply charge is a fixed fee of roughly 70 c to $1 a day, around $300 a year, that you pay whether you use a lot of gas or none. Think of it like a phone plan: a low call rate means little if the monthly access fee is high and you barely call. For a light user the supply charge dominates; for a heavy user the usage rate dominates, so the cheapest plan genuinely differs between the two.
Gas has no DMO or VDO, so there is no safety net
It is worth saying plainly, because national content often blurs it. Electricity has reference prices: the Australian Energy Regulator (AER) sets the Default Market Offer (DMO) in New South Wales, south-east Queensland and South Australia, and Victoria has its own Victorian Default Offer set by the Essential Services Commission. Gas has neither. There is no capped reference price for gas, so unlike electricity there is no regulated benchmark telling you whether an offer is fair. That makes the spread between a sharp gas plan and a lazy one wider, and it puts the work of judging value back on you, which is why comparing on the total matters more for gas than for power. Retail gas competition exists in the eastern states where reticulated gas is sold, namely Victoria, New South Wales, South Australia, Queensland and the ACT.
How to actually compare gas plans
Compare four things on the same usage, not just the rate. First, the usage rate in c/MJ. Second, the daily supply charge in cents per day, which never stops. Third, any conditional discount, such as a pay-on-time or direct-debit discount, and the conditions you must meet to keep it, because a discount you miss is not a discount. Fourth, the contract terms: any benefit period, exit fees or price-change clauses. Add the usage charge and the supply charge across a full year for your real consumption, then rank plans on that yearly total. A plan that wins on the c/MJ rate can lose on the total once the supply charge and a missed discount are counted.
The bigger question: is gas or electric cheaper?
The honest answer is that for heating and hot water, electric is increasingly cheaper to run. You cannot compare c/MJ to c/kWh directly: 1 kWh equals 3.6 MJ, and you must also apply appliance efficiency. A gas heater is about 80 to 90% efficient. A plain resistive electric heater has a coefficient of performance (COP, the units of heat moved per unit of electricity) of about 1, so it is expensive. But a reverse-cycle air conditioner or a heat-pump hot water system has a COP of about 3 to 5, meaning it delivers 3 to 5 units of heat per unit of electricity. On a worked example, gas at 4 c/MJ costs about 4.7 c per useful megajoule once you allow for 85% efficiency, while a heat pump at 30 c/kWh and a COP of 3.5 costs about 2.4 c per useful megajoule. The widget below lets you test your own numbers.
Interactive explainer
Is gas or electric cheaper?
Pick an appliance, set your gas and electricity rates and the electric appliance efficiency, and the calculator shows the cost of one unit of useful heat from each, so you compare like with like.
Compare the cost of useful heat
Useful heat is the energy that actually warms the room or the water, after appliance losses.
Cost per unit of useful heat
How it works: 1 kWh equals 3.6 MJ, so an electricity rate in c/kWh is divided by 3.6 to get c/MJ of input, then divided by the COP to get the cost of useful heat. A gas rate in c/MJ is divided by the appliance efficiency for the same reason. Estimate only, before any discounts; your real cost depends on your retailer\'s exact rates, the daily supply charges on each fuel and your appliance.
Assumptions: defaults use a gas rate of 4 c/MJ, an electricity rate of 30 c/kWh, a gas appliance efficiency of 85% and a heat-pump COP of 3.5 (1 for a cooktop or a plain electric heater), all indicative and varying by state and retailer. Sources: Canstar Blue 2026, AER, AEMC.
| Appliance | Inputs | Cost per useful MJ | How it is worked out |
|---|---|---|---|
| Gas heater or hot water | 4 c/MJ usage rate, 85% appliance efficiency | ~4.7 c per useful MJ | Input energy is already in MJ. Divide the c/MJ rate by the appliance efficiency to get the cost of useful heat. |
| Resistive electric heater | 30 c/kWh, COP of 1 | ~8.3 c per useful MJ | Convert c/kWh to c/MJ by dividing by 3.6. A plain electric heater turns one unit of electricity into one unit of heat, so it stays expensive. |
| Reverse-cycle air conditioner | 30 c/kWh, COP of 3.5 | ~2.4 c per useful MJ | The same electricity rate, but the heat pump moves about 3.5 units of heat per unit of electricity, so the cost of useful heat drops below gas. |
| Heat-pump hot water | 30 c/kWh, COP of 3.5 | ~2.4 c per useful MJ | Same physics as the air conditioner. For hot water, an efficient heat pump often beats gas per unit of useful energy. |
| Option | Headline rate | Cost per useful MJ |
|---|---|---|
| Gas appliance (85% efficient) | 4 c/MJ | ~4.7 c |
| Resistive electric (COP 1) | 30 c/kWh | ~8.3 c |
| Heat pump (COP 3.5) | 30 c/kWh | ~2.4 c |
What this looks like in real homes
How the cheapest gas plays out for real households
The mechanics above are not theory. They are exactly how Australian households pick the wrong plan, or the wrong fuel:
The light user fooled by a low rate
A Sydney unit uses gas only for cooking. The household picks the plan with the lowest c/MJ rate, then finds the bill barely changes, because almost all of it is the daily supply charge of about 80 c a day. For them, the plan with the smallest supply charge would have been the cheapest gas, not the one with the sharpest rate.
The heavy heater who should weight usage
A Melbourne home heats with ducted gas all winter. Their usage charge dwarfs the supply charge, so the c/MJ rate is what decides their total. Chasing a plan with a tiny daily charge but a higher usage rate would cost them more, because usage is where their money goes.
The hot-water switch that beat gas
A Brisbane household replaces an ageing gas hot-water unit with a heat-pump system at a COP of about 3.5. Even though gas looked cheap at 4 c/MJ, the heat pump delivers useful heat for about 2.4 c per megajoule against about 4.7 c for gas, so the running cost falls and the gas supply charge disappears with the connection.
The standing offer that quietly costs more
A household never compares and sits on an old standing gas offer for years. With no reference price capping gas, that plan drifts well above sharp market offers, and the home pays hundreds more a year than a quick comparison on its real usage would have found.
The insider insight
The cheapest gas is increasingly no gas at all
Here is the part most cheapest-gas guides never mention. They compare gas plan against gas plan and never convert the units, so they miss the comparison that matters most. You cannot read c/MJ against c/kWh by eye: 1 kWh equals 3.6 MJ, and you then have to apply appliance efficiency before the two numbers mean the same thing. Do that conversion and the picture changes. Gas at 4 c/MJ looks cheaper than electricity at 30 c/kWh until you remember a heat pump moves several units of heat per unit of electricity, while gas loses a chunk to flue and combustion losses.
The non-obvious truth: because 1 kWh equals 3.6 MJ and you must apply appliance efficiency, for heating and hot water the cheapest "gas" is increasingly no gas at all. A reverse-cycle air conditioner or a heat-pump hot-water system at a COP of 3 to 5 can deliver useful heat for less per megajoule than gas, and switching the appliance also removes the gas daily supply charge from the bill entirely. So the question is not only "which gas plan is cheapest?" but "should this job be on gas at all?"
The practical consequence: when a gas appliance is due for replacement, run the useful-heat comparison before you replace like with like. The cheapest gas decision sometimes ends with switching the heat off gas and the daily supply charge with it.
Grounded in the analysis
What you should actually do to find the cheapest gas
Specific moves that follow from how gas pricing works, not generic advice.
Add up the total, not the rate
Take each plan's usage rate and daily supply charge and add them across a full year for your real usage. Rank plans on that yearly total. A light user lands on the smallest supply charge; a heavy heater lands on the sharpest c/MJ rate.
Compare every retailer that supplies you
Because gas has no reference price, offers vary widely and an old standing offer can cost hundreds more. Compare every retailer that supplies your address on your usage, then switch to the lowest total, watching the conditions on any discount.
Ask whether the job should be on gas
Before replacing a gas heater or hot-water unit like for like, run the useful-heat comparison. An efficient electric heat pump at a COP of 3 to 5 often costs less to run and removes the gas supply charge altogether.
See how the charges are built on our guide to the Australian gas bill, check whether bottled gas changes the maths in LPG versus natural gas, then compare the electric side on our electricity plans page. To size your own usage first, run the gas usage calculator and check it against the average gas bill in Australia.
Current figures, last updated 2026-06-15
Indicative Australian gas and electricity figures for 2026. Sources: Canstar Blue 2026, the Australian Energy Regulator (AER) and the Australian Energy Market Commission (AEMC). Charges vary by state, network and retailer, so confirm your own rates on a current bill before relying on a figure.
The bottom line
Why finding the cheapest gas the right way pays off
The cheapest gas is not the lowest advertised rate. It is the lowest yearly total of the usage charge plus the daily supply charge for your own usage, which is why a light user and a heavy heater land on different plans. Gas has no reference price, so the gap between a sharp plan and a lazy one is wide and comparing on the total is what protects you. And the biggest saving may not be a gas plan at all: once you convert c/kWh to c/MJ and allow for appliance efficiency, an efficient electric heat pump often beats gas for heating and hot water, supply charge and all. Add up the total, compare every retailer that supplies you, and ask whether each job should still be on gas. That habit, not chasing a single headline rate, is what finds the genuinely cheapest energy into 2026.
Common questions
A Selectra expert answers your cheapest gas questions
Do not pick the plan with the lowest advertised usage rate alone. The cheapest gas plan is the one with the lowest total of the usage charge (your energy in megajoules multiplied by the c/MJ rate) plus the fixed daily supply charge (roughly 70 c to $1 a day, about $300 a year) for your actual usage. A light user who only cooks should weight the supply charge, because it makes up most of a small bill; a household that heats with gas all winter should weight the c/MJ rate, because usage dominates their total. Add both halves across a full year and compare plans on what you would really pay. Because gas has no reference price, offers vary widely, so it pays to compare every retailer that supplies your address.
It depends on the appliance, and the honest answer is increasingly electric for heating and hot water. You cannot compare c/MJ to c/kWh directly: 1 kWh equals 3.6 MJ, and you must also account for appliance efficiency. A gas heater is about 80 to 90% efficient. A plain resistive electric heater has a coefficient of performance (COP, the units of heat moved per unit of electricity) of about 1, so it is expensive. But an efficient reverse-cycle air conditioner or heat-pump hot water system has a COP of about 3 to 5, meaning it delivers 3 to 5 units of heat per unit of electricity. On a worked example (gas at 4 c/MJ, electricity at 30 c/kWh), a heat pump can cost about 2.4 c per useful megajoule against about 4.7 c for gas. So for heating and hot water, the cheapest "gas" is often no gas at all.
No. Electricity has reference prices: the Australian Energy Regulator (AER) sets the Default Market Offer (DMO) in New South Wales, south-east Queensland and South Australia, and Victoria has its own Victorian Default Offer set by the Essential Services Commission. Gas has neither. There is no regulated reference price capping gas offers or telling you whether a plan is fair, so the spread between a sharp gas plan and a lazy one is wider than it is for electricity. That is exactly why comparing gas plans on the total cost, not the headline rate, matters so much.
Compare four things on the same usage, not just the usage rate. First, the usage rate in cents per megajoule (c/MJ). Second, the daily supply charge in cents per day, which runs every day of the year. Third, any conditional discount, such as a pay-on-time or direct-debit discount, and the conditions you must meet to keep it. Fourth, the contract terms: any benefit period, exit fees or price-change clauses. Then add the usage charge and the supply charge across a full year for your real consumption and rank plans on that total. A plan that wins on the c/MJ rate can lose on the total once the supply charge and a missed discount are counted.
Usually one of three reasons. First, usage: if you heat with gas and they do not, your winter usage can run two to three times higher, so your bill is larger even on the same plan. Second, the plan: because gas has no reference price, two homes on the same street can sit on very different usage rates and supply charges, and an old or standing offer can cost much more than a sharp market offer. Third, the supply charge: a plan with a low c/MJ rate but a fat daily supply charge can quietly cost a light user more than a plan with a higher rate and a smaller daily charge. Compare both halves of each plan on your own usage to see which difference is doing the work.
