As we accelerate towards a clean, renewable energy system, here in Victoria the companies that own the gas networks are getting desperate. You might have seen or heard their pro-gas advertising during the recent federal election and, if you still have a gas connection, you probably have received your notice of this year’s gas price hike. The grab for profits doesn’t end there.
In this story, we explain how the methane gas industry is attempting to greenwash their polluting product and threaten even bigger price rises, all to keep their profits flowing for as long as possible at our expense.
Instead of deceitful delay tactics, what we need is a plan to scale back the gas network in an orderly way, prioritising climate, affordability and equity – not fossil fuel profits.
Promises made during privatisation
When Victoria’s gas networks were sold off by the Kennett government in the 1990s, one of the touted benefits of privatisation was that the risk of owning these assets would transfer from consumers and taxpayers onto investors [1]. The idea was that we the consumers wouldn’t have to worry about getting stuck footing large bills if the value of the network dropped.
In return, the investors that bought the gas networks from the government were entitled to reasonable cost recovery, including profits, for keeping the gas flowing to the end users.
Now that gas use is declining, the networks want to have their cake and eat it too by attempting to push the economic risk back onto the consumers – households and businesses.
Times have changed and gas is in decline
The rules that regulate the gas networks assumed that demand for methane gas would always grow.
This was an odd assumption to make back in 2008 when the National Gas Rules were established, given that it was already 20 years after the first international emissions reductions targets were proposed and a year after a federal election fought on the basis of climate action [2].
In 2025, it’s clear that our use of methane gas has already peaked and has been declining every year since 2020 [3]. Gas prices have also tripled and keep going up[4]. In Victoria, new gas connections are ending and gas appliances are being phased out. More and more Victorians are seeing the benefits of efficient electric alternatives.
Electrification is the only credible path we have towards a safe climate and affordable energy bills.
Given the rising gas costs and incentives to electrify it’s unsurprising that gas consumption is plummeting in Victoria.
Household and small business gas consumption dropped 4.5% between 2023 and 2024, and consumption by larger users dropped 4.1% [5]. These numbers are consistent with longer-term trends.
The problem of fewer gas customers
Although the gas networks are privately owned, the costs of owning and maintaining the pipes (plus a profit margin) are passed on in full to everyone who pays a gas bill.
As people decide they no longer need gas, the network costs are spread across a diminishing pool of customers.
This means higher gas bills for everyone who stays connected to the network. This problem is sometimes referred to as a ‘death spiral’.
Eventually, the only people and businesses that will remain connected to the gas network are those that don’t have another option:
- renters who can’t choose their fixed appliances,
- people living in apartments (which can be hard to electrify),
- businesses that don’t have straightforward alternatives,
- and others.
This means that, without action, the ‘death spiral’ will disproportionately impact people who can least afford it.
Exposing the self-interested tactics of the gas industry
While Victoria’s households and businesses are grappling with change, the gas networks are not helping. They are putting their efforts into obfuscating the issues, greenwashing, and ensuring profits keep flowing into their own pockets.
HERE ARE JUST A FEW EXAMPLES OF WHAT THEY’VE BEEN UP TO.
Since at least 2014 the gas networks have been netting almost double the profit approved by regulators. They do this by overestimating their costs and underestimating their revenue. This produces a margin of ‘supernormal’ profits, adding 5 percent to a typical household gas bill [6].
Earlier this year AusNet attempted to make its 620,000 gas customers in western Melbourne and central and western Victoria pay more. Their justification was that, because the gas pipeline is expected to become obsolete faster, customers should pay them their revenue and profits sooner. The regulator rejected their proposal, finding that AusNet overestimated their costs [7].
In March 2025 the gas network owner Australian Gas Infrastructure Group (AGIG) threatened to increase network access costs for consumers by between 16 and 20 percent per annum. Their threat was in direct response to the Victorian government’s proposal to cut emissions and bills by phasing out gas appliances [8]. This would severely raise energy bills for 1.4 million gas customers across Victoria.
The gas industry has also spent years attempting to greenwash their activities to delay climate action and extend the life of their polluting industry.
In 2017, gas industry groups including the networks released the first version of Gas Vision 2050, a lobbying document that claimed fossil methane gas could be made clean with hydrogen blending, biofuels and carbon capture and storage [9]. Most or all of these claims have since been exposed or are under investigation for greenwashing [10], [11], [12].
In May 2025 the Ad Standards Community Panel found that Australian Gas Networks’ MasterChef renewable gas ad misled consumers into thinking they could purchase renewable gas in their own kitchens (they can’t) [13]. (We even ran an ad campaign to point this out)
In March 2025 the Ad Standards Community Panel found that Australian Gas Infrastructure Group’s pro-gas and anti-electric advertising was unsubstantiated and misleading [14].
These are the actions of a self-interested industry that cares about nothing but profits.
Gas is dirty and unsafe.
Gas is a polluting fossil fuel that releases carbon dioxide and leaks methane, two powerful greenhouse gases, into the atmosphere. From extraction to use, it damages land, pollutes water, and harms health, especially when burned inside homes.
The solution? Make it easier to disconnect!
On the bright side, there are some positive changes afoot.
The Australian Energy Market Commission (AEMC), the body which makes the rules governing the gas networks, has now recognised that gas consumption is in terminal decline.
Two consumer advocacy groups, Energy Consumers Australia and the Justice and Equity Centre, put forward rule change requests to the AEMC that would end two settings: currently, it is free to connect to the gas network and it costs money to disconnect from it.
We regularly hear from EV supporters who are aghast when they discover it costs money to disconnect from gas. It’s a perverse disincentive to taking real climate action.
Energy Consumers Australia have argued that people connecting to gas should pay the full costs instead of those disconnecting having to foot the bill. The Justice and Equity Centre proposed that people disconnecting from the network shouldn’t have to pay, and the process of disconnecting should be carefully planned to keep costs low.
Our submission to the AEMC strongly supports these proposals and makes the point that there should be no new connections at all. Allowing new connections only increases inequity and worsens climate pollution. Victoria is now banning new connections and other states need to follow.
A plan for the future that puts people before profits
What is really needed is a plan for an orderly retreat of the gas network that ensures nobody is left behind. This means the costs of running the gas network are equitably shared as gas use continues to decline. It also means having goals and timelines for getting Victorian homes, government buildings and businesses off gas, with support for those that face the highest barriers to switching to efficient electric.
Ultimately, gas network investors have made a lot of money, but times are now changing. They agreed to take on the risk of owning these assets. It’s time they remembered who their customers are and took responsibility. Through misleading advertising, regulatory loopholes, and attempts to pass on costs, they’re dragging their feet on the transition while we all pay the price. It doesn’t have to be this way.
With the right policy settings, a clear plan to retire the gas network, and support for those most impacted, we can leave gas behind and build a cleaner, fairer, all-electric future.
