Compare the cheapest gas prices in Melbourne, Victoria

Note: The prices listed below are based on a certain set of assumptions and apply to one particular area of Melbourne, so treat the information below as a general guide only.

Which providers offer the cheapest gas prices in Melbourne?

Our price calculations suggest that Tango Energy, Sumo and CovaU Energy currently provide the cheapest natural gas deals in Victoria, according to this specific comparison.

However, if you have visited this page before, you will notice that the cheapest providers have changed. Gas prices can change fairly often, so it’s important to keep an eye out for any increase in costs.

It’s also important to highlight that, in some cases, the cheapest gas deals will only be available when you also purchase electricity from the same retailer.

To calculate the expected cost of natural gas for you, we’ve used a typical Victorian home in Melbourne as an example.

The Australian Gas Network is the distributor network supplying gas to over 1.7 million households in Melbourne.

We will also assume this household has gas usage requirements of 40,500MJ per year, which is our estimated general usage in Victoria. All households will vary in gas usage, and rates charged will differ across locations.

Our price calculations are based on set assumptions and should only be used as a general indicator of which retailer may offer the cheapest natural gas.

The calculations below factor in usage and supply rates, as well as any conditional discounts available on the retailer’s cheapest market offer.

Cheap gas deals Victoria

A breakdown of your gas bill

A typical gas bill will include supply charges, usage charges, discounts and any additional fees.

Keep in mind that it is not uncommon for gas distributors to charge different rates and/or fees across winter (peak) and non-winter (off-peak) months.

Usage charge

This is the component of the bill that reflects the amount of gas you used.

Some networks charge a single rate for all gas usage. However, it’s more common that customers receive what is called a ‘block rate tariff’.

• Single rate tariffs: Customers are charged a fixed rate for their gas usage, regardless of the time of day.
• Block rate tariffs: This is a type of tariff whereby the rate customers are charged will depend on how much gas they have used. As an example, a rate of 2.8c/MJ may apply to the first 50MJ of gas used in one day and the next 50MJ per day may then be charged at a rate of 2.5c/MJ. Any gas after that will then cost 2.1c/MJ.

Supply charge

This is an ongoing daily charge of typically between 70 and 90 cents per day, depending on your gas network.

Customers with a mains gas connection incur this fee regardless of the amount of gas they use, even if they don’t use gas at all.

Discounts

Most retailers offer customers a discount on the usage charge component of their gas bill. However, these discounts will almost always be subject to certain conditions.

Some of the most common discount conditions include paying your bills on time, paying bills via direct debit and purchasing both electricity and gas through the same retailer.

Gas discounts in Victoria range from around 5% to 33% and will sometimes only apply for a benefit period of one or two years.

Other fees and charges

You may notice some seemingly arbitrary charges added on top of your bill.

The explanation for these could be a credit card surcharge, connection fee, late payment fee or even a paper mailing fee.

The bill should make clear what the charge is related to, but if not, don’t be afraid to question your gas company on it.

Types of gas contracts in Victoria

There are two types of gas contracts – standard contracts and market contracts.

Standard contracts are government-regulated deals, whereby the industry regulator oversees rates, fees, terms and conditions to ensure minimum consumer protections.

Standard contracts are generally poor value as the rates aren’t particularly competitive, with no discounts. Conversely, standard offers are flexible and reliable with no contract period or exit fees.

Most Victorians are on what is called a ‘market contract’. Under a market contract, the retailer has broad discretion to set its own prices and terms.

These contracts are almost always better value than standard contracts as they often include generous conditional discounts.

Customers looking at market offers must, however, be vigilant of exorbitant rates, exit fees and short benefit periods.

Is gas cheaper than electricity?

Whether gas or electricity is cheaper to power your home depends on how much gas you intend to use.

Australian Gas Networks estimates that an average home, using an average total of 46 Gigajoules (Gj) for cooking, heating and hot water, in Victoria spends about $1,490 each year on natural gas.

That might sound like a lot, but AGN estimates that it is $45 less than what is spent on electricity a year – not to mention the carbon emissions saving.

Households with medium to high gas usage will usually find that gas works out notably cheaper than electricity. Customers with a mains gas connection using very little gas may, however, find themselves worse off for it.

That’s because, while gas usage rates are much lower than electricity usage rates, a household with both electricity and gas is paying two sets of daily supply charges.

Which gas supplier is rated highest in Victoria?

Just because a retailer is cheap doesn’t mean it’s necessarily good. There are plenty of other factors to consider when picking the right gas supplier for you, such as customer support, bill clarity and even its attitude to environmental sustainability.

Red Energy is the 2024 winner of the ‘Most Satisfied Customers’ award in Victoria, scoring five stars for overall satisfaction, value for money, customer service, bill and cost clarity, and ease of sign-up, along with three stars for online tools and advice.

Every year, Canstar Blue reviews Victorian natural gas suppliers to help customers find the highest-rated providers. Click the link below to see who else came close to snagging top place.

Compare VIC Gas Suppliers