The price that consumers pay for natural gas has two main components, which include various taxes and fees:

  • Commodity cost: The cost of the natural gas itself, either as produced natural gas or as natural gas purchased at a market trading hub or under a contract by marketers and utilities.
  • Transmission and distribution costs: The costs to move the natural gas by pipeline from where it is produced to local natural gas utilities, and the cost to deliver 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

Retail prices for natural gas can vary greatly between states and cities. The differences are a result of six major factors:

  • Distance from areas producing natural gas
  • Availability and capacity of transmission pipelines to move natural gas from producing areas, storage, and trading hubs to distribution hubs
  • 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?

Customers can reduce their natural gas bills in several ways:


Federal government programs provide grants to state government agencies for energy assistance to households that have limited budgets:


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 states by contacting the state public utility or service commission or by contacting the local natural gas utility.