Average Gas Cost per MJ in Australia: What You’re Really Paying

With energy bills on the rise, understanding what you’re paying for gas has never been more important. For many Australian households, gas is a key expense for heating, cooking, and hot water. But deciphering your gas bill can feel complicated. 

This guide breaks down the average cost of gas in Australia, explaining how prices are structured and what you can do to make sure you're on a suitable plan. 

Gas bills are generally composed of two main parts: 

1. Usage Rate: This is the cost for the gas you actually use, measured in cents per megajoule (c/MJ). 
2. Daily Supply Charge: This is a fixed daily fee you pay to stay connected to the gas network, regardless of how much gas you use. Supply charges are always in cents per day (c/day) 

It's also useful to know the difference between retail and wholesale gas prices. Wholesale prices are set by the Australian Energy Market Operator (AEMO), while retail prices are what you, the customer, pay. Retailers buy gas from the wholesale market and then sell it to you, adding their own costs and margins. This article will focus on the retail prices you see on your bill. 

Understanding Gas Pricing in Australia 

Before we dive into the numbers, let's clarify a few key concepts that will help you understand your gas bill and make a fair gas rates comparison. 

What Is an MJ (Megajoule)? 

A megajoule (MJ) is the standard unit of measurement for gas consumption in Australia. Think of it like a kilowatt-hour (kWh) for electricity. One MJ represents a specific amount of energy. To give you an idea, heating water for a five-minute shower uses around 12-15 MJ, while an hour of cooking on a gas stove might use 5-10 MJ. 

For context, 1 kWh of electricity is equivalent to 3.6 MJ of gas. Knowing this helps you compare the energy output and costs of different appliance types. 

Components of Your Gas Bill 

Your bill is more than just the amount of gas you use. The total cost is determined by: 

• Usage Charges (c/MJ): This is the variable part of your bill. The more gas you use, the more you pay. Some retailers offer tiered rates, where the price per MJ changes after you use a certain amount. 
• Supply Charges (c/day): This fixed daily fee covers the cost of maintaining the gas pipelines and infrastructure that deliver gas to your home. You pay this every day, even if you don't use any gas. This is a crucial factor in any gas plan comparison. 

Prices are also influenced by your location, as different distribution zones have different costs to transport gas. Retailers then add their own markup to these base costs. 

Government and Regulatory Oversight 

Gas prices aren't set in a vacuum. The Australian Energy Regulator (AER) oversees the market in most states to ensure fairness and transparency. Some states also have their own regulators, like the Essential Services Commission (ESC) in Victoria and the Economic Regulation Authority (ERA) in Western Australia. 

These bodies provide frameworks that retailers must operate within. Government-run websites like Energy Made Easy and Victorian Energy Compare are available to help you make a price comparison for gas from different providers. 

Average Gas Cost per MJ 

So, what is the typical cost of gas in Australia? Gas usage charges vary significantly between states due to differences in network costs, regulations, and market competition. Here’s a state-by-state breakdown of the average retail usage charges you can expect to see. 

Note: Figures are indicative and subject to annual tariff updates. Always refer to official state or retailer pricing for your address before making comparisons.

What Influences Gas Prices? 

The rate you pay is affected by several factors. Understanding them can help you see why your bill might be higher or lower than the average. 

1. Location and Distribution Zone: Your postcode matters. The cost to transport gas through different pipeline networks varies, and these costs are passed on to you. 
2. Retailer Pricing Models: Retailers offer different types of plans. A "standing offer" is a basic, government-regulated plan, while "market offers" are competitive deals with discounts or other incentives. Some plans have tiered blocks, where the rate per MJ changes depending on your consumption. 
3. Seasonal Demand: Gas prices can be influenced by seasonal demand. During winter, higher usage for heating can drive up wholesale costs, which retailers may pass on to customers. 
4. Carbon and Environmental Policy: Government policies aimed at reducing carbon emissions and transitioning to renewable energy can impact the long-term cost of gas. 

How to Estimate Your Gas Costs 

Want to get a rough idea of your annual gas bill? You can use a simple formula. 

Let’s take a typical two-person home that uses 20,000 MJ of gas per year. 

• Usage Cost: 20,000 MJ × 4.0 c/MJ = 80,000 cents, or $800. 
• Supply Cost: An average daily supply charge is around 74 cents. 74c × 365 days = 27,010 cents, or ~$270. (Your actual rate may differ depending on your distributor.) 
• Total Annual Cost: $800 + $270 = $1,070. 

Here is the basic formula you can use with your own figures: 

Annual Cost = (Total Annual Usage in MJ × Rate in c/MJ) ÷ 100 + (Daily Supply Charge in $ × 365) 

This calculation can be a useful tool when you compare gas plans. 

Government Tools and Consumer Resources 

To find a plan that suits your needs, it’s important to use official, independent resources. Sticking with the same provider for years might mean you're paying a loyalty penalty. 

• EnergyMadeEasy.gov.au: This is the AER’s official comparison website for households in NSW, QLD, SA, ACT, and Tasmania. You can upload a past bill for a precise comparison. 
• Compare.Energy.Vic.gov.au: This is the Victorian Government's independent comparison tool. 
• Energy Policy WA: Publishes regulated gas tariffs for small-use customers in Western Australia. 

When you compare gas charges, remember to check the daily supply charge, contract terms, and any exit fees, not just the usage rate. Reviewing your plan at least once a year is a great habit to get into. 

Take Control of Your Gas Bill 

Government data shows that gas usage charges differ across states. In Victoria, off-peak residential rates are around 3.08 c/MJ, while Tasmania’s small residential tariffs range between 3.99 and 4.02 c/MJ. In New South Wales, usage charges are about 4.3 c/MJ on market offers and roughly 5.2 c/MJ for standing offers, now aligned with the regulated reference price. These figures refer to the usage component only and will vary depending on location and plan. 

The key takeaway is that you have the power to choose. By using official comparison tools and exploring private commercial comparison platforms like Electricity Provider, you can compare gas plans and find options that may better suit your needs. 

Ready to see if you can find a better offer? Start your gas rates comparison at electricityprovider.com.au today and take control of your energy bills. 

Disclaimer: Prices and estimates in this article are indicative only and based on data from the AER Annual Retail Energy Market Performance Report 2025, Energy Made Easy, Victorian Government Gazette 2025, Energy Policy WA, and the Tasmanian Economic Regulator. Actual costs will vary depending on your provider, usage, and location. Electricity Provider compares plans from a panel of providers, which does not represent the whole market.