LPG vs natural gas: What should you get?

Fact Checked

Australians have two choices in terms of gas for their homes: liquid petroleum gas (LPG) or natural gas. But what’s the difference? Which one is better? Canstar Blue discusses the main differences and advantages — and whether one is cheaper than the other.

Aside from electricity powering Aussie homes, gas can be a common source of power for many utilities. Whether it’s frying dinner on a stovetop or lunging into that well-earned bath after work, gas has a range of uses and may even be a cost-effective alternative to relying solely on electricity. But which type of gas reigns supreme? We’re of course referring to the contest between natural gas and LPG.

What’s the difference between LPG and natural gas?

The main difference between natural gas and LPG is how they are supplied to a customer. Natural gas is distributed via the mains pipe connected to a house and used for cooking or heating water. LPG is supplied in a cylinder or tank, and is then connected to a specific appliance, such as a barbeque or outdoor heater.

Is LPG propane?

Yes, LPG consists mainly of propane — a type of gas produced as a by-product of refining or processing fossil fuels. Otherwise known as ‘liquified petroleum gas’, LPG produces a slightly higher level of heat than natural gas, but will need to be replaced once the cylinder has run out of gas.

Is natural gas methane?

Natural gas is composed of methane, an odourless and highly combustible gas sourced from onshore or offshore fuel deposits. Methane is lighter than air and dissipates at a much higher rate than LPG if leaking, which can be safer.

Natural gas vs LPG vs LNG vs CNG

It’s not just LPG and natural gas that comes up when discussing fuel sources and energy. LNG and CNG are also worth getting familiar with. Here’s a breakdown to help you understand what sets them apart:

• Natural gas: Methane (CH4) is the main component. It’s lighter than air and disperses easily in leaks. It’s also delivered through pipelines directly to homes and businesses for various uses
• LPG (liquefied petroleum gas): A mixture of propane and butane (C3H8 & C4H10), sometimes combined, stored in a liquefied state under pressure
• LNG (liquefied natural gas): Natural gas is transformed into a liquid state for efficient long-distance transport through a process called cryogenic cooling
• CNG (compressed natural gas): Natural gas (methane) stored under high pressure for efficient storage. This compressed form makes it a suitable fuel source for vehicles.

But enough science, what are the selling points of natural gas and LPG?

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Natural gas advantages

Here are the main advantages of natural gas:

• Practical and reliable: A source of energy with a constant flow of supply directly to home
• Cheaper running costs: Can be less expensive to run for gas cooking, hot water and heating
• Less harsh on the environment: Emits slightly less carbon dioxide than LPG and other fossil fuels.

Natural gas tip: Only use a licensed gas fitter to install appliances and ensure you maintain them according to the manufacturer’s warranty. Also, keep an eye on your gas meter or pipes for any damage that may disrupt gas supply.

LPG advantages

Here are the biggest advantages of LPG:

• Portability: Can be moved around, transported and stored if or when required
• Higher heat: Burns at a higher temperature for greater cooking efficiency
• Great for rural customers: Ideal for those who live in regional areas or without access to natural gas lines.

LPG tip: If you don’t know how much gas is left in your LPG cylinder, try pouring hot water down the side of the cylinder. After a minute or two, place your hand on the cylinder and the area that’s cool to touch indicates its gas level.

Natural gas vs LPG: Is LPG cheaper than natural gas?

Natural gas is generally cheaper per megajoule (MJ) than LPG. However, natural gas customers will need to pay a supply charge — a daily fee which our database reveals usually varies between 50c and $1 for being connected to the mains gas network. LPG customers may have to pay an equipment fee once a year that covers the cost of renting gas cylinders. To give you an idea of the price, Origin’s yearly fee is $44.50 per bottle in 2024.

The price customers pay for natural gas or LPG will also depend on how much gas their household consumes. For instance, a home with higher gas usage will be better suited to natural gas, whereas customers with low to moderate usage should consider LPG, regardless of whether a mains gas connection is available.

Take the above information as a general guide only and remember that gas suppliers will vary in price depending on where you live. Also, the price of natural gas and LPG can fluctuate in line with global market supply and exchange rates, meaning gas retailers can change rates at their discretion.

Natural gas suppliers

Here is a list of natural gas providers in Australia. Please note that suppliers may not retail gas in all areas, and some may only sell gas when purchased with electricity.

• ActewAGL
• AGL
• Alinta Energy
• CovaU
• Discover Energy
• Dodo
• EnergyAustralia
• Engie (formerly Simply Energy)
• GloBird Energy
• Kleenheat
• Kogan Energy
• Lumo Energy
• Momentum Energy
• Origin Energy
• Perth Energy
• Powershop
• Red Energy
• Sumo
• Tango Energy

LPG suppliers

Here are five LPG suppliers in Australia. Keep in mind this list does not feature all LPG suppliers, as there may be local companies servicing your area.

• Agas National
• Kleenheat
• Origin LPG
• Elgas
• Supagas

LPG or natural gas: Which is better?

If price is what ultimately sways your decision, then both LPG and natural gas can be affordable options. However, this will depend on a number of factors, such as your location, gas suppliers available in your area, household gas usage and the current base rates of gas plans. There may even be greater deals or savings on offer if bundled with electricity.

The daily supply charge of natural gas will be the difference in price between LPG and natural gas. That being said, if gas is used on a regular basis, natural gas could be a more reliable option as opposed to constantly replacing LPG cylinders. Use our energy plan comparison tool below to do your research on the best LPG and natural gas energy providers in Australia.

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