Domestic price of natural gas in Australia - Data and Analysis (1971-2034)

IBISWorld forecasts that the domestic price of natural gas will jump 5.1% in 2026-27 to 197.15 index points. Prolonged disruption to LNG shipping through the Strait of Hormuz and damage to Qatari LNG infrastructure in March 2026, which knocked out 17% of the country's LNG output according to state-owned gas company, QatarEnergy, are expected to keep Asian LNG prices elevated. This will follow through into higher prices when LNG Sale and Purchase Agreements are renegotiated between Australian producers and export partners. While fixed-price long-term agreements will somewhat limit price growth, higher export returns are set to steadily lift domestic contract prices during 2026-27. This forecast is predicated on the assumption that the US-Iran conflict won't be sufficiently resolved to ensure LNG normalises through the latter half of 2026-27.Natural gas prices are not uniform across Australia, as the Australian gas market is split into three regions: Western Australia, the Northern Gas Region – supplying the Northern Territory - and the Eastern Gas Region, which covers the rest of Australia, including Queensland, New South Wales, the Australian Capital Territory, Victoria and Tasmania. In 2018, the completion of the Northern Gas Pipeline connected the northern and eastern gas regions, while the western gas region remains unconnected to the eastern states. Western Australian gas prices are less exposed to international LNG prices owing to the Western Australian Government's Domestic Gas Policy, which requires LNG exporters to reserve at least 15% of their exportable supply for the local market.The Australian gas market has changed over the past decade due to the development of multiple major LNG export facilities, which has led Australia to become one of the world's largest exporters of LNG. Consequently, domestic natural gas prices have become increasingly exposed to international supply and demand conditions. As global gas prices have historically been higher than domestic prices, linking these markets has caused domestic gas prices to rise over the past decade.Due to concerns about domestic gas availability, the ADGSM was introduced in July 2017 to incentivise LNG producers to supply domestic markets. This mechanism enables the Federal Government to restrict gas exports when the domestic supply is threatened. The mechanism is designed to be a final recourse for the Federal Government to protect Australia's access to natural gas, and as of September 2026, it has never been activated. Initially set to expire on 1 January 2023, the ADGSM has been extended to 1 January 2030.The domestic price of natural gas has been volatile over the past five years. The price rose in 2018-19 as a greater share of Australian gas production was directed towards export markets rather than domestic use. Price then fell over the two years through 2020-21 as improved supply conditions and weaker demand during the COVID-19 pandemic reduced market pressure. A sharp increase followed in 2022-23, driven by strong LNG demand in export markets and disruptions associated with the Russia-Ukraine conflict, which prompted European and Asian buyers to seek alternative gas sources. In response to tightening domestic supply conditions, the Federal Government strengthened its market intervention. In March 2023, the ADGSM was reformed to allow quarterly reviews of domestic energy needs and stronger powers to curb LNG exports if required. The government had also signed a new Heads of Agreement with East Coast LNG exporters on 29 September 2022, under which the exporters committed to offering uncontracted gas domestically to help reduce supply-shortfall risks. The agreement ceased on 1 January 2026, with the Federal Government proposing a replacement in the form of the Domestic Gas Reservation Scheme 2026 in September 2026, which would require LNG exporters to dedicate up to 20% of their exportable supply to the domestic market.Natural gas prices declined in 2024-25 as supply conditions improved and demand weakened. In March 2024, APLNG reaffirmed its commitment to domestic supply by entering sales agreements totalling 11.2 petajoules with Origin Energy and Shell. Lower European gas demand also contributed to softer global LNG conditions, reflecting energy security measures and climate policies that reduced gas consumption. Together, stronger supply availability and weaker external demand placed pressure on domestic natural gas prices downwards. While the Northern Gas Pipeline helped gas flow from the Northern Territory to Queensland between 2018-19 and 2023-24, increasing gas availability in the eastern gas region, supply shortages in the Northern Territory have cut gas flows during 2024-25 and 2025-26, raising prices.During 2025-26, this downwards trends contracted somewhat, as commodity-linked gas contracts surged, partially offsetting the impact of weaker heating demand and improved supply that had kept prices low during the first half of 2025-26. Despite this drop, the significant price hike in 2022-23 and the expected jump during 2026-27 have led natural prices to soar in recent years, with IBISWorld expecting the domestic price of natural gas to swell at a compound annual rate of 9.1% over the five years through 2026-27.