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Megajoules (MJ): Gas usage and costs explained

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In this article, Canstar Blue will explain what a Megajoule is and how you can use this knowledge to get more information out of your gas billing, and maybe even save some money.

If you have natural gas at your property, then you have probably noticed there are a lot of numbers on your bill followed by ‘MJ’. But what does that even mean? And, how does it work when comparing plans and understanding your gas bill? In this guide, we reveal all you need to know about megajoules, including how the different states and territories charges these rates on your natural gas plan.

What does ‘MJ’ mean on my gas bill?

MJ is an abbreviation for MegaJoule, which is a unit of energy equivalent to one million joules. A property’s gas usage is measured in megajoules and is recorded using a gas meter. This information is then passed on to your natural gas retailer for billing purposes. Your gas usage information (in MJs) will be detailed on your bill, helping you understand your gas usage habits and how you can save.

Gas appliances usually detail their energy consumption in terms of megajoule-hours (MJ/h), that is, the number of MJs the appliance consumes in one hour. For example, a gas heater with an input of 25 MJ/h will consume 25 MJs in one hour.

If you see a gas appliance described in terms of just megajoules, you can safely assume it means its consumption is in MJ/h. If you notice that a gas heater or oven lists a kilowatt (kW) value instead, then that is referring to its heat output, not gas consumption. According to Elgas, at 100% efficiency, 1 kW of heat output will consume 3.6 MJ of gas.

What do gas prices charged per MJ look like?

Natural gas customers are charged per MJ of gas they use. Customers are usually charged on a ‘block rate’, that is, the rate customers are charged varies depending on how much gas they use. Generally, the more gas that is consumed, the lower the usage rate will be for subsequent ‘blocks’ of usage. For example, a typical gas usage block tariff might look like this:

First 80 MJ per day 3 c/MJ
Next 50 MJ per day 2.8 c/MJ
Remaining usage 2.5 c/MJ

General guide only

The above example illustrates blocks of usage per day, however some gas providers may describe their blocks in terms of other measures of time, such as months or billing quarters. An example of the latter might look like this:

First 5,000 MJ per quarter 3.1 c/MJ
Next 2,000 MJ per quarter 2.7 c/MJ
Next 1,000 MJ per quarter 2.4 c/MJ
Remaining usage 2.3 c/MJ

General guide only

The rate that customers pay for gas varies across different gas networks and states. For example, Western Australian and South Australian households tend to spend a little more on gas than customers in other states, while Victorian customers are often treated to some of the lowest gas prices in the country.

It is also important to note that WA gas bills and price fact sheets display gas usage in terms of ‘units’ rather than MJs, with one unit equivalent to 3.6 MJ. This way, gas prices are comparable to electricity prices. Unlike in other states, gas prices in WA don’t vary that much between the different retailers as prices are regulated by the state government.

How to read your gas bill

Your gas bill includes a lot of information, so it’s understandable if you struggle to make heads or tails of it. With that said, now that you have a better idea about megajoules and block rates, you can now start to understand your bill a little easier. Keep in mind that the design of your gas bill and the information it includes will vary across retailers.

Most gas bills will include a graph similar to the one shown below that provides some insight into your natural gas usage over time. The left-hand side of this bill illustrates the average cost of gas in the most recent months, while the right axis illustrates average daily gas consumption. Knowing this information will help identify trends in your gas usage and whether you need to cut back to save.

Page two of the bill is usually a bit more technical. The ‘read type’ column indicates whether someone actually read your meter, or if the gas company instead made an estimate to bill you. The ‘start read’ column indicates the number on your gas meter at the end of your previous billing period. The ‘end read’ column indicates the number on your meter at your most recent meter read. The next column, heating value, is where it gets a little confusing.

Heating value is the amount of heat released through burning a quantity of supplied gas. The ‘pressure factor’ column takes into consideration the volume of gas-based pressure and temperature. Your total gas usage (in MJ) is calculated by subtracting the start read from the end read, and multiplying that result by the heating value and pressure factor. The end result is your real usage in MJ. This figure is then multiplied by your usage rate. Supply charges and extra fees are then added on as discounts are subtracted. The end result is the total amount you owe.

While you might just look at what you owe and then toss the bill out, it’s important to check this section to make sure you’re being charged correctly. If not, don’t be afraid to take it up with your provider.

Read more: How to read your electricity bill

How to find a better gas deal

Understanding your gas usage is the first step towards finding a better deal. Now that you understand joules, megajoules and everything in between, you’re ready to get out there and compare providers. And what better way than through Canstar Blue’s free natural gas comparison tool? Here, you’ll find plans from more than 15 providers and best of all, we won’t ask for any of your personal details. Simply type in your postcode and you’re good to go.

Compare Gas Plans & Providers

Original Author: Brendon O’Neill

Kelseigh Wrigley
Energy Specialist
Kelseigh Wrigley was a content producer at Canstar Blue for three years until 2024, most recently as an Energy Specialist. She holds a Bachelor of Journalism from the Queensland University of Technology.

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