Electricity and Gas 22/09/2020

How to Save Money on Gas by Comparing Plans

The cost of natural gas in Australia varies widely not only from state to state but also between energy providers. In fact, in Queensland and the ACT, the gap between the cheapest and most expensive rate is over a $100 – that’s hundreds of dollars that you can save yearly if you have the right plan. You can save money on gas with the right plan.

How do you find the best deal?

First, let’s talk about how gas rates work.

Natural gas plans charge you with two rates: the supply rate is what you pay per day just to be connected to the grid, while the usage rate is what you pay per megajoule (MJ) of gas that you actually consume.

You will also be charged based on tariff. In Australia there are two main gas tariffs:

  • Flat rate: standard price for gas, no matter when you use it
  • Block: gas prices depend on how much gas you’ve used so far that day. Rates generally drop for each successive block.

The gas retailers that are available to you depend on your location.

  • You’ll be able to choose your gas provider if you live in NSW, Victoria, Queensland, South Australia, Western Australia, or the ACT.
  • You only have access to LPG and gas canisters if you live in the Northern Territory.
  • You can choose between two gas providers in some parts of Tasmania.

What is the average gas cost in Australia?

Although it depends on your provider, here’s a preview of how much gas costs on average in four of the major states in Australia.

New South Wales 3.21c/MJ
Victoria 2.19c/MJ
Queensland 5.18c/MJ
South Australia 3.98c/MJ

 

How to read your gas bill

Your gas bill contains a lot of information that may seem overwhelming to you. However, you only need to worry about a few sections such as rates, tariffs and usage. Here’s what to watch out for when reading your gas bill.

  • Bill period. These are the dates included in this billing cycle. You may be charged for natural gas quarterly or monthly.
  • Supply charge. This is the amount you pay per day for being connected to the gas network. To get your total supply charge, just multiply this amount by the number of days in the bill period.
  • Usage rate. This is the amount you pay per MJ of gas that you consumed during the bill period.
  • Total usage. This is the total MJs of gas you consumed during the whole bill period and the difference between your current meter reading and the one in your last bill.
  • Gas discounts. Energy providers may offer discounts with a flat amount (e.g. $10) or percentage (e.g. 10%).
  • Gas tariffs. As mentioned above, single-rate tariff charges you with a standard price for all gas usage. Meanwhile, a block tariff charges you a specific rate for the first “block” of gas consumption in a day and a lower rate for subsequent blocks.
  • Some gas plans feature seasonality where your rates vary during winter and non-winter seasons.

How to get cheaper gas

Have you checked your gas bill lately? If you are stuck on a bad deal, it doesn’t have to stay that way. There are plenty of options when it comes to natural gas. Here are a few tips on how to get cheaper gas.

  • Check your previous bill. Your previous bill can give you an idea of how much gas you consume daily. Use this as reference, so you know how much you’ll save on a new plan.
  • Check price. When comparing prices, be sure to look at rates and not estimates. You want usage rates that are the lowest possible. Most discounts are conditional and temporary, so they should not be a long-term solution if you want to lower your gas bill.
  • Check tariff rates. Natural gas is often charged on a block tariff, where usage rates fall after you consume the set amount per day. If you rely a lot on natural gas, find a plan that offers a significant drop on succeeding blocks.
  • Check additional fees. You want to limit fees to gas that you actually use. Avoid plans that charge extra fees for paying through credit card or receiving a paper bill.
  • Compare gas plans regularly. Most benefits and discounts expire after a year or two. Your rates may rise significantly after that time. We recommend that you assess and compare your plan every year so you can take advantage of new offers.

How to switch to a different gas plan so you can save money on gas

Once you have compared gas plans and decided to switch, the process is easy and straightforward.

  1. Cancel your existing plan. Check your current contract and see if you have to pay an early exit fee to switch.
  2. Contact your new supplier and have your personal details on hand, including your address and meter identification. They will send a request to your distributor, who will then send it to your current retailer.
  3. Settle your bill. After paying your final bill and any outstanding fees from your old supplier, your gas account will be up and running on your new plan.

Check out our comparison tool for gas rates to start comparing your plan and paying less on your electricity costs.