Why Australian gas costs what Asia will pay

Before 2015: gas stayed in Australia

For decades, gas from the east coast was sold to Australians, because there was no practical way to ship it anywhere else. The price came down to local supply and local demand.

The wholesale price, which is what retailers pay before they add their costs and sell it to you, sat at around $3 to $5 a gigajoule. (A gigajoule is just the unit gas is sold in.)

How LNG exports tied our gas to world prices

Between 2015 and 2016, three huge liquefied natural gas (LNG) export terminals opened at Gladstone in Queensland. They turn gas into a liquid so it can go on a ship.

From then on, gas companies had a choice. They could sell gas to Australians, or ship it to buyers in Asia. So Australian buyers now have to compete with what Asian buyers will pay.

The Reserve Bank has tracked this. Since 2015, wholesale gas prices here have closely tracked international prices.

How much gas prices have gone up

The wholesale price has roughly tripled.

It also means something happening on the other side of the world can land on your bill. During the energy crisis that followed the war in Ukraine, spot prices averaged almost $30 a gigajoule in the June quarter of 2022, and some days went above $40. The world price had moved, and ours moved with it.

It's happened again this year. In 2026, war in the Middle East has disrupted gas shipments, and a strike on a major Saudi oil pipeline in September pushed gas prices up again.

Today spot prices sit around $9 to $10 a gigajoule. Gas companies are offering retailers $13 to $15 a gigajoule for gas delivered in 2027 and 2028. That's three to four times what Australians paid before the terminals opened.

Why more gas won't bring prices down

The obvious answer is to produce more gas. Australia has tried that already.

East-coast gas production is 2.8 times what it was in 2015, and prices still tripled. Effectively all of the extra gas went overseas. Without a rule that keeps some of it here, new gas goes the same way.

Rules like that are harder than they sound. Western Australia has required gas exporters to set aside 15% of their gas for the local market since 2006. A 2024 parliamentary inquiry found exporters were supplying about 8%, and that the policy was "no longer fit for purpose". WA spot prices still rose significantly between 2020 and 2024.

There's also a price cap. A $12 a gigajoule "reasonable price" cap came in as an emergency measure in December 2022 and was made permanent from July 2023. It's had limited impact: gas companies are still offering retailers $13 to $15 for 2027 and 2028.

Victoria's gas supply is running out

Victoria's first gasfields were easy to get at, which is part of why gas used to be cheap. That supply is running down. Victorian production has fallen by about 35% since 2015, and one of the three gas plants at Longford has closed.

New finds aren't going well either. In March 2026, a company exploring Bass Strait announced that one of its biggest prospects couldn't be brought up at a reasonable price.

So for Victorians, staying on gas means paying world prices for Queensland gas while waiting on new local gas that, if it's found, is likely to cost even more.

What you can do about high gas prices

You can't change what gas sells for in Asia. You can change how much of your home runs on it.

Gas is now the expensive way to heat a home and heat water. Here's what switching to electric is worth. Even a home that barely uses gas pays hundreds a year just to stay connected. Our paper on the cost of gas has the full evidence.

In much of the country, there's also free electricity in the middle of the day. Our check takes about a minute and tells you whether you can get it.

Check if you can get free electricity in the middle of the day →