Northern Victorian councils say it is imperative that natural gas services in the region are improved, despite a prediction that it will be very costly to do so.

Councils have been lobbying for more than a decade for improved gas services between Echuca and Mildura.

The Victorian Government is spending $1 million on a feasibility study, but the first stage of research has raised questions about the viability of servicing the towns, including Kerang and Swan Hill.

The Murray River Group of Councils says it is unfortunate that the study shows gas would not be competitive with other fuels.

But the group's chairman, the Loddon mayor Geoff Curnow, says the councils will continue their strong advocacy for better natural gas services.

A second phase of research will look at whether there are cheaper options to deliver the fuel to the region's homes and businesses.