Is gas cheaper than electricity in Australia?

Is gas cheaper than electricity in Australia

Gas and electricity are the two most widely available energy sources in Australia but is one cheaper than the other? This isn’t easily answered in one or two sentences as it depends on a number of factors, including installation costs, efficiency, lifetime running costs, and even the cost of appliances. Each factor must be taken into consideration to determine the total cost of each energy source.

Base costs

As a commodity, natural gas is less expensive than electricity. In most areas, both the supply charge and the usage cost can be up to half the price for gas than for electricity.

Installation costs

If you have to pay for gas or electricity to be connected to your home or business, you will have to pay installation fees. Costs vary depending on how many connection points you require and how far you are from a gas pipeline or an electricity cable. However, the fact is that most Australian homes are connected to mains electricity but only half are connected to mains gas. Therefore, the costs of installing gas need to be considered within the overall cost if that applies to you.

Energy efficiency

The energy efficiency (and therefore cost effectiveness) of gas and electricity differs depending on the appliance you are using. 

Hot water

Gas water heaters are more expensive to buy but they are far more efficient and could therefore save you money over the lifetime of the heater. Electric storage water heaters that continue to heat all day are the most expensive option as they are constantly in use. By contrast, gas continuous flow hot water systems only heat water as you need it and instantly provide hot water on demand.


Both gas-fired central heating and standalone gas heaters tend to be less expensive to run than standard electric heaters. Plus, gas heaters carry a star label that informs consumers how efficient each is, which helps you to save money over the lifetime of the heater.


Electric fans are the cheapest cooling appliance to buy but aren’t the most efficient as they merely circulate air rather than cooling it. Evaporative cooling systems are the cheapest air conditioners to run but add moisture to the air so aren’t great for humid climates. Refrigerative air conditioners are the most expensive but tend to provide the best results.


Gas cooktops are cheaper to run and more responsive (which thereby means you use less energy) than standard electric cooktops, although induction cooktops are far more efficient than their standard electric brothers. Compared to standard electric cooktops, far less heat is wasted with a gas cooktop - when you turn the gas off, the flame extinguishes and so does the heat. Electric cooktops continue to stay warm long after they have been switched off. Gas ovens, too, are cheaper to use.

The energy market is rapidly changing but, for now, gas seems to be cheaper overall. However, it is essential that you take your own circumstances and lifestyle, as well as the availability of each energy source, into consideration.

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