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Natural gas explained Natural gas prices

The price that consumers pay for natural gas has two main components, which include various taxes and fees: 1

  • 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 or stored to local natural gas distribution 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 where natural gas is produced or stored
  • Availability and capacity of transmission pipelines to move natural gas from producing areas, storage facilities, and trading hubs to distribution hubs
  • Volumes and characteristics (such as timing and volatility) of consumer demand
  • Costs of distribution, taxes, and other charges
  • State regulations
  • Availability of competing suppliers

U.S. average annual Henry Hub, citygate, and residential natural gas prices, 2003-2022

Line chart with 3 lines.
An interactive line chart showing U.S. average annual Henry Hub, city gate, and residential natural gas prices in 2003 through through 2022.
The chart has 1 X axis displaying values. Data ranges from 2003 to 2022.
The chart has 1 Y axis displaying dollars per thousand cubic feet. Data ranges from 2.11 to 14.75.
Data source: U.S. Energy Information Administration, spot prices from Short-Term Energy Outlook, December 2023 and citygate and residential prices from Natural Gas Annual, September 2023Note: Prices are nominal dollar value (not adjusted for inflation).
End of interactive chart.

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U.S. average annual residential natural gas price by state, 2022

Map of United States of America, small with 2 data series.
dollars per thousand cubic feet
An interactive map showing U.S. average annual residential natural gas prices by state in 2022.
End of interactive chart.

Click to enlarge

How can residential natural gas consumers reduce their natural gas bills?

Consumers 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. Consumers 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.

1 Unless otherwise indicated, prices are nominal prices or prices that have not been adjusted to remove the effect of changes in the purchasing power of the U.S. dollar. Prices that are adjusted for changes in the purchasing power of the U.S. dollar are identified as real prices.

Last updated: December 21, 2023, with data available at the time of update.