The price that consumers pay for natural gas has two main components that include various taxes and fees:
- Commodity costs: The cost of the natural gas itself, either as produced natural gas or as natural gas purchased at a market trading hub or purchased under a contract by marketers and utilities.
- Transmission and distribution costs: The cost to move the natural gas by pipeline from where it is produced to local natural gas companies and the cost to then move it to consumers.
The shares of these two cost components vary according to natural gas market conditions.
Average natural gas prices in the United States
Although national average prices for natural gas have declined in recent years, retail prices in individual states and cities can vary greatly. These differences are a result of six factors:
- Distance from areas producing natural gas
- Availability and capacity of transmission pipelines delivering natural gas
- Volumes and characteristics (such as timing and volatility) of customer demand
- Costs of distribution, taxes, and other charges
- State regulations
- Availability of competing suppliers
How can residential customers reduce their natural gas bills?
There are several ways to reduce natural gas bills:
- Shop for lower-priced natural gas if customer choice programs are available. Customers can find more information on the status of natural gas residential choice programs in each state using EIA's Natural gas residential choice programs resource.
- Participate in a local gas company's yearly budget plan (if available) to spread natural gas bills evenly throughout the year.
- Check natural gas space-heating equipment for efficient operation.
- Reduce thermostat settings, especially when buildings are unoccupied.
- Obtain an energy audit to identify other ways to reduce consumption.
There are federal and state energy assistance programs available to residential natural gas customers who have a limited budget. The Low Income Home Energy Assistance Program (LIHEAP) is a federal program that distributes funds to states to help low-income households pay heating bills.
Additional state energy assistance and fuel fund programs may be available to help households pay energy bills during winter emergencies. Customers can find out if they qualify for assistance in their state by contacting their state public utility commission or by contacting their local natural gas company.