Victoria should withdraw from any policy discussions over east coast gas and expect to pay higher energy prices, industry leaders say, after the state government permanently banned fracking and kept the moratorium on onshore gas development until 2020.

On Tuesday, Premier Daniel Andrews announced the permanent ban on the exploration and development of all onshore unconventional gas in Victoria, including hydraulic fracturing ("fracking") and coal seam gas. He said legislation would be introduced in Parliament later this year.