Restrict gas exports to use here: Victoria

Australian gas exports should be limited so they can be used generating power at home, Victoria's government says.

Victoria wants natural gas exports "immediately" restricted for use in Australia. (AAP)

Victoria has dared the prime minister to make good on his threat to restrict gas exports "immediately".

Malcolm Turnbull has threatened to trigger gas export controls if exporters fail to make more supply available locally in a bid to make up for an expected gas shortfall.

"Australian gas should be reserved for Australian households and Australian businesses," a Victorian Labor government spokesman said on Tuesday.

"There is only a shortage of gas because Australia exports two-thirds of our supply overseas.

"We now have a ridiculous situation where it's cheaper to buy Australian gas in Japan then it is here at home."

The prime minister received two reports on Monday showing the expected shortfall in gas for 2018 is more than three times larger than forecast earlier in the year.

Victoria has a moratorium on coal seam gas exploration and fracking, but Mr Turnbull wants the state to develop more gas resources.