Page 1 of 21

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549
                                   FORM 10-Q


                   QUARTERLY REPORT UNDER SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


 For the Quarter Ended March 31, 2000            Commission File Number 1-12899


                            SOUTH JERSEY GAS COMPANY
             (Exact name of registrant as specified in its charter)


             New Jersey                             22-0398330
      (State of incorporation)          (IRS employer identification no.)

                    1 South Jersey Plaza, Folsom, NJ  08037
          (Address of principal executive offices, including zip code)

                                 (609) 561-9000
              (Registrant's telephone number, including area code)


Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                             Yes  [X]      No  [  ]


As of May 5, 2000 there were 2,339,139 shares of the registrant's common stock
outstanding.  All common shares are owned by South Jersey Industries, Inc., the
parent company of South Jersey Gas Company.

                            Exhibit Index on page 21


                                 - Title Page -



                        PART I    FINANCIAL INFORMATION



            Item 1.  Financial Statements -- See Pages 3 through 11







                                     SJG-2


<TABLE>
                          SOUTH JERSEY GAS COMPANY AND SUBSIDIARY

                   CONDENSED STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED)
                          (In Thousands Except for Per Share Data)

<CAPTION>
                                                       Three Months Ended
                                                            March 31,
                                                    ------------------------
                                                       2000          1999
                                                    ----------    ----------
<S>                                                 <C>           <C>
Operating Revenues:
  Utility                                            $146,627      $134,587
  Other                                                   375           495
                                                    ----------    ----------
      Total Operating Revenues                        147,002       135,082
                                                    ----------    ----------
Operating Expenses:
  Gas Purchased for Resale                             88,818        78,674
  Utility Operations                                    9,811         9,160
  Other Operations                                        348           370
  Maintenance                                           2,770         1,282
  Depreciation                                          4,920         4,611
  Income Taxes                                         12,608        12,718
  Other Taxes                                           4,335         4,456
                                                    ----------    ----------
      Total Operating Expenses                        123,610       111,271
                                                    ----------    ----------

Operating Income                                       23,392        23,811

Interest Charges:
  Long-Term Debt                                        3,833         4,107
  Short-Term Debt and Other                             1,194           914
                                                    ----------    ----------
      Total Interest Charges                            5,027         5,021


Income Before Preferred Dividend Requirements          18,365        18,790
Preferred Stock Dividend Requirements                      40            41
Preferred Securities Dividend Requirements                731           731
                                                    ----------    ----------

Net Income Applicable to Common Stock                 $17,594       $18,018
                                                    ==========    ==========

Average Shares of Common Stock Outstanding              2,339         2,339
                                                    ==========    ==========

Earnings Per Common Share                               $7.52         $7.70
                                                    ==========    ==========

Dividends Declared Per Common Share                     $1.80         $1.73
                                                    ==========    ==========


<FN>
The accompanying footnotes are an integral part of the financial statements.
</FN>
</TABLE>


                                   SJG-3

<TABLE>

                    SOUTH JERSEY GAS COMPANY AND SUBSIDIARY

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                               (In Thousands)

<CAPTION>
                                                                         (Unaudited)
                                                                          March 31,         December 31,
                                                                  -----------------------   -------------
                                                                     2000         1999          1999
                                                                  ----------   ----------   -------------
<S>                                                               <C>          <C>          <C>
Assets
------
Property, Plant and Equipment:
   Utility Plant, at original cost                                 $729,901     $691,669        $721,338
     Accumulated Depreciation                                      (195,958)    (183,041)       (192,240)
   Gas Plant Acquisition Adjustment - Net                             1,757        1,832           1,776
                                                                  ----------   ----------   -------------
          Property, Plant and Equipment - Net                       535,700      510,460         530,874
                                                                  ----------   ----------   -------------
Available-for-Sale Securities                                         1,701          886           1,662
                                                                  ----------   ----------   -------------
Current Assets:
   Cash and Cash Equivalents                                            335        1,552           4,694
   Accounts Receivable                                               61,552       53,848          37,066
   Unbilled Revenues                                                 15,557       16,862          21,294
   Provision for Uncollectibles                                        (860)        (932)           (932)
   Natural Gas in Storage, average cost                              10,182       11,864          26,840
   Materials and Supplies, average cost                               3,952        3,821           4,085
   Prepaid Taxes                                                          -            -           4,069
   Prepayments and Other Current Assets                               2,254        2,060           2,461
                                                                  ----------   ----------   -------------
          Total Current Assets                                       92,972       89,075          99,577
                                                                  ----------   ----------   -------------
Accounts Receivable - Merchandise                                       599          903             684
                                                                  ----------   ----------   -------------
Regulatory and Other Non-Current Assets:
   Environmental Remediation Costs:
     Expended - Net                                                  17,840       21,679          25,702
     Liability for Future Expenditures                               51,029       52,939          51,029
   Gross Receipts and Franchise Taxes                                 3,030        3,474           3,141
   Income Taxes - Flowthrough Depreciation                           11,286       12,264          11,531
   Deferred Fuel Cost - Net                                           6,517             -         13,174
   Deferred Postretirement Benefit Costs                              4,820        5,365           4,914
   Other                                                              6,734        8,401           7,951
                                                                  ----------   ----------   -------------
          Total Regulatory and Other Non-Current Assets             101,256      104,122         117,442
                                                                  ----------   ----------   -------------
               Total Assets                                        $732,228     $705,446        $750,239
                                                                  ==========   ==========   =============


<FN>
The accompanying footnotes are an integral part of the financial statements.
</FN>
</TABLE>

                                   SJG-4

<TABLE>

                   SOUTH JERSEY GAS COMPANY AND SUBSIDIARY

                    CONDENSED CONSOLIDATED BALANCE SHEETS
                               (In Thousands)

<CAPTION>
                                                                        (Unaudited)
                                                                         March 31,          December 31,
                                                                  -----------------------   -------------
                                                                     2000         1999          1999
                                                                  ----------   ----------   -------------
<S>                                                               <C>          <C>          <C>
Capitalization and Liabilities
------------------------------
Common Equity:
  Common Stock, Par Value $2.50 per share:
    Authorized - 4,000,000 shares
    Outstanding - 2,339,139 shares                                   $5,848       $5,848          $5,848
  Other Paid-In Capital and Premium on Common Stock                 117,817      102,817         117,817
  Retained Earnings                                                  71,851       68,243          58,457
                                                                  ----------   ----------   -------------
      Total Common Equity                                           195,516      176,908         182,122
                                                                  ----------   ----------   -------------
Preferred Stock and Securities:
  Redeemable Cumulative Preferred  -  Par Value $100 per share,
  Authorized 45,504,46,404 and 45,504 shares, respectively
  Outstanding:
    Series A, 4.70% -  1,200, 2,100 and 1,200 shares                    120          210             120
    Series B, 8.00% - 19,242 shares                                   1,924        1,924           1,924
  Company-Guaranteed Mandatorily Redeemable
   Preferred Securities of Subsidiary Trust
   Par Value $25 per share, 1,400,000 shares
   Authorized and Outstanding                                        35,000       35,000          35,000
                                                                  ----------   ----------   -------------
      Total Preferred Stock and Securities                           37,044       37,134          37,044
                                                                  ----------   ----------   -------------
Long-Term Debt                                                      181,373      192,523         183,561
                                                                  ----------   ----------   -------------
        Total Capitalization                                        413,933      406,565         402,727
                                                                  ----------   ----------   -------------
Current Liabilities:
  Notes Payable                                                      82,000       59,000         118,900
  Current Maturities of Long-Term Debt                                8,876        8,876           8,876
  Accounts Payable                                                   28,739       31,179          34,822
  Customer Deposits                                                   5,462        5,506           5,386
  Environmental Remediation Costs                                    12,534        8,752          12,534
  Taxes Accrued                                                      15,729       15,172             634
  Interest Accrued and Other Current Liabilities                      7,955        7,675          10,422
                                                                  ----------   ----------   -------------
      Total Current Liabilities                                     161,295      136,160         191,574
                                                                  ----------   ----------   -------------
Deferred Credits and Other Non-Current Liabilities:
  Deferred Income Taxes - Net                                        94,467       86,789          93,543
  Environmental Remediation Costs                                    38,495       44,187          38,495
  Pension and Other Postretirement Benefits                          12,705       13,767          12,303
  Investment Tax Credits                                              4,757        5,141           4,849
  Deferred Revenues - Net                                                 -        7,505               -
  Other                                                               6,576        5,332           6,748
                                                                  ----------   ----------   -------------
      Total Deferred Credits and Other Non-Current Liabilities      157,000      162,721         155,938
                                                                  ----------   ----------   -------------
Commitments and Contingencies

        Total Capitalization and Liabilities                       $732,228     $705,446        $750,239
                                                                  ==========   ==========   =============


<FN>
The accompanying footnotes are an integral part of the financial statements.
</FN>
</TABLE>

                                   SJG-5


<TABLE>
                    SOUTH JERSEY GAS COMPANY AND SUBSIDIARY

          CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
                                (In Thousands)

<CAPTION>
                                                                         Three Months Ended
                                                                              March 31,
                                                                     -------------------------
                                                                        2000           1999
                                                                     ----------     ----------
<S>                                                                  <C>            <C>
Cash Flows from Operating Activities:
  Net Income Applicable to Common Stock                                $17,594        $18,018

  Adjustments to Reconcile Net Income to Cash Flows
   Provided by Operating Activities:
    Depreciation and Amortization                                        5,829          5,001
    Provision for Losses on Accounts Receivable                             72             63
    Revenues and Fuel Costs Deferred - Net                               6,657         12,507
    Deferred and Non-Current Income Taxes and Credits - Net              1,029             97
    Environmental Remediation Costs - Net                                7,862          6,328
    Changes in:
      Accounts Receivable                                              (18,893)       (23,105)
      Inventories                                                       16,791         15,985
      Prepayments and Other Current Assets                                 207            207
      Prepaid and Accrued Taxes - Net                                   19,164         26,381
      Accounts Payable and Other Accrued Liabilities                    (8,474)        (9,299)
    Other - Net                                                          1,067          2,899
                                                                     ----------     ----------
        Net Cash Provided by Operating Activities                       48,905         55,082
                                                                     ----------     ----------
Cash Flows from Investing Activities:
  Purchase of Available-for-Sale Securities                                (39)             -
  Capital Expenditures, Cost of Removal and Salvage                     (9,937)       (13,044)
                                                                     ----------     ----------
        Net Cash Used in Investing Activities                           (9,976)       (13,044)
                                                                     ----------     ----------
Cash Flows from Financing Activities:
  Net Repayments of Lines of Credit                                    (36,900)       (38,000)
  Principal Repayments of Long-Term Debt                                (2,188)        (2,187)
  Dividends on Common Stock                                             (4,200)        (4,050)
                                                                     ----------     ----------
        Net Cash Used in Financing Activities                          (43,288)       (44,237)
                                                                     ----------     ----------
Net Decrease in Cash and Cash Equivalents                               (4,359)        (2,199)
Cash and Cash Equivalents at Beginning of Period                         4,694          3,751
                                                                     ----------     ----------
Cash and Cash Equivalents at End of Period                                $335         $1,552
                                                                     ==========     ==========


<FN>
The accompanying footnotes are an integral part of the financial statements.
</FN>
</TABLE>


                                   SJG-6


              Notes To Condensed Consolidated Financial Statements
                                   (Unaudited)


Note 1.  Significant Accounting Practices:

         Consolidation - The consolidated financial statements include the
    accounts of South Jersey Gas Company (SJG) and its wholly-owned statutory
    trust subsidiary, SJG Capital Trust.  All significant intercompany accounts
    and transactions were eliminated.  SJG reclassified some previously reported
    amounts to conform with current year classifications.  In the company's
    opinion, the condensed consolidated financial statements reflect all
    adjustments needed to fairly present SJG's financial position and operating
    results at the dates and for the periods presented.  SJG's businesses are
    subject to seasonal fluctuations and, accordingly, this interim financial
    information should not be the basis for estimating the full year's operating
    results.

         South Jersey Industries, Inc. (SJI) owns all of the outstanding common
    stock of SJG.

         Estimates and Assumptions - Our financial statements are prepared to
    conform with generally accepted accounting principles.  Management makes
    estimates and assumptions that affect the amounts reported in the financial
    statements and related disclosures.  Therefore, actual results could differ
    from those estimates.

         New Accounting Pronouncement - In June 1998, the Financial Accounting
    Standards Board (FASB) issued Statement No. 133, "Accounting for Derivative
    Instruments and Hedging Activities," which is effective for the first
    quarter of our fiscal year ending December 31, 2001.  This statement
    establishes accounting and reporting standards for derivative instruments,
    including those embedded in other contracts, and for hedging activities.  It
    requires recognizing derivatives as assets or liabilities at fair value on
    the balance sheet.  We are currently evaluating the effects of FASB No. 133
    on the Company's financial condition and results of operations, which will
    vary based on our use of derivative instruments at the time of adoption.

Note 2.  Income Taxes:

         The significant components of federal and state income taxes reflected
    in the condensed statements of consolidated income for the three months
    ended March 31, 2000 and 1999 are as follows (in thousands):

                                   SJG-7


                                               Three Months Ended
                                                    March 31,
                                            -----------------------
                                              2000           1999
                                            --------       --------
         Current:
          Federal                           $  8,689       $  9,357
          State                                2,891          3,265
                                            --------       --------
           Total Current                      11,580         12,622

         Deferred:
          Federal                                984            325
          State                                  136           (131)
                                            --------       --------
           Total Deferred                      1,120            194

         Investment Tax Credit                   (92)           (98)
                                            --------       --------
           Net Income Taxes                 $ 12,608       $ 12,718
                                            ========       ========


Note 3.  Recent Regulatory Actions:

         In January 1997, the Board of Public Utilities (BPU) granted SJG a
    total rate increase of $10.3 million. The $6.0 million base rate portion of
    the increase was based on a 9.62% rate of return on rate base, which
    included an 11.25% return on common equity. Additionally, SJG's threshold
    for sharing pre-tax margins generated by interruptible and off-system sales
    and transportation (Sharing Formula) increased from $4.0 million to $5.0
    million. With the completion of major construction projects, this $5.0
    million threshold increased by $2.8 million to a total of $7.8 million.  SJG
    keeps 100% of pre-tax margins up to the threshold level and 20% of such
    margins above that level. In October 1998, the BPU approved a revision to
    the Sharing Formula as part of an agreement to modify SJG's Temperature
    Adjustment Clause (TAC). The revision credits the first $750,000 above the
    current threshold level to the Levelized Gas Adjustment Clause (LGAC)
    customers. Thereafter, SJG keeps 20% of the pre-tax margins as it has
    historically.

         Effective January 10, 2000, the BPU approved full unbundling of SJG's
    system. This allows all natural gas consumers to select their natural gas
    supplier.  As of March 31, 2000, 47,281 of SJG's residential customers had
    elected to purchase their gas commodity from someone other than us.  The
    bills of those using a gas supplier other than SJG are reduced for cost of
    gas charges and applicable taxes. The resulting decrease in revenues is
    offset by a corresponding decrease in gas costs and taxes under SJG's BPU-
    approved fuel clause.  SJI's net income, financial condition and margins are
    not affected.

                                   SJG-8

         In June 1998, SJG filed a petition with the BPU requesting a change to
    the TAC. The request was granted in October 1998. As a result, SJG
    experiences reduced fluctuations in income when weather is warmer or colder
    than normal.

         In August 1998, SJG filed with the BPU to recover increased remediation
    costs expended from August 1995 through July 1998.  In September 1999, the
    BPU approved the requested annual recovery level of $6.5 million. This
    represents an annual increase of approximately $4.5 million over the
    recovery previously included in rates. In July 1999, SJG filed its annual
    RAC with the BPU requesting recovery of carrying costs on unrecovered
    remediation costs and proposed no change in the current RAC rate for the
    next 3 years. In January 2000, the BPU approved the recovery of carrying
    costs on unrecovered remediation costs and SJG's proposal to keep its
    current RAC rate in effect through October 2002.

         In September 1998, SJG filed its annual LGAC, TAC and Demand Side
    Management Clause (DSMC) with the BPU. The LGAC and DSMC cover the period
    November 1 through October 31 of each year. The TAC period runs from October
    1 through May 31. In May 1999, the BPU approved a $7.1 million increase in
    rates as part of this filing, which included the results of the previous two
    annual filings. In April 2000, SJG made a TAC and LGAC filing and
    anticipates making TAC, LGAC and DSMC filings during the summer of 2000.

         In February 1999, the Electric Discount and Energy Competition Act
    became law. This law established unbundling, where redesigned utility rate
    structures allow natural gas and electric consumers to choose their energy
    supplier. SJG filed its unbundling proposal in April 1999 and received BPU
    approval of its settlement in January 2000.

         In addition to allowing all customers to select their own supplier
    effective January 10, 2000, the unbundling settlement also created an
    incentive to customers to select a supplier, other than SJG, in the form of
    a Market Development Credit (MDC). This credit will be provided to
    customers over the next two years and will approximate $2.5 million plus
    carrying costs through December 2001. The majority of this credit was
    provided for on SJG's books as a Deferred Credit. Therefore, the MDC will
    not materially impact future periods.

         Also included in the settlement was the approved recovery of carrying
    costs on the RAC, as previously discussed, and a modification to SJG's LGAC.
    Under-recovered gas costs of $11.9 million as of October 31, 1999, and
    carrying costs thereon, will be recovered over 3 years. The LGAC for the
    period starting November 1999, will continue to operate as it has in the
    past.

                                   SJG-9

Note 4.  Retained Earnings:

         Restrictions exist under various loan agreements regarding the amount
    of cash dividends or other distributions that we may pay on SJG's common
    stock.  SJG's retained earnings, which is free of these restrictions, was
    approximately $65.8 million as of March 31, 2000.

Note 5.  Commitments and Contingencies:

         Construction Commitments - The estimated net cost of construction and
     environmental remediation programs of SJG for 2000 totals $49.8 million.
     Commitments were made regarding these programs.

         Pending Litigation - SJG is subject to claims arising in the ordinary
    course of business and other legal proceedings.  We set up reserves when
    these claims become apparent.  We also maintain insurance and record
    probable insurance recoveries relating to outstanding claims.

         Environmental Remediation Costs - SJG incurred and recorded costs for
    environmental clean up of sites where SJG or its predecessors operated gas
    manufacturing plants.  SJG stopped manufacturing gas in the 1950s.

         Since the early 1980s, SJG recorded environmental remediation costs of
    $109.1 million, of which $58.1 million was spent as of March 31, 2000.  With
    the assistance of an outside consulting firm, we estimate that future costs
    to clean up SJG's sites will range from $51.0 million to $161.3 million.  We
    recorded the lower end of this range as a liability. It is reflected on the
    2000 consolidated balance sheet under the captions Current Liabilities and
    Deferred Credits and Other Non-Current Liabilities. SJG did not adjust the
    accrued liability for future insurance recoveries, which we have been
    successful in pursuing. We used these proceeds to offset related legal fees
    and to reduce the balance of deferred environmental remediation costs.
    Recorded amounts include estimated costs based on projected investigation
    and remediation work plans using existing technologies.  Actual costs could
    differ from the estimates due to the long-term nature of the projects,
    changing technology, government regulations and site-specific requirements.

         SJG has two regulatory assets associated with environmental cost.  The
    first asset is titled Environmental Remediation Cost: Expended -Net.  These
    expenditures represent what was actually spent to clean up former gas
    manufacturing plant sites. These costs  meet the requirements of FASB No.
    71, "Accounting for the Effects of Certain Types of Regulation." The BPU
    allows SJG to recover expenditures through July 1998 and petitions to
    recover costs through July 1999 are pending.

         The other asset titled Environmental Remediation Cost: Liability for
    Future Expenditures relates to estimated future expenditures determined
    under the guidance of FASB No. 5, "Accounting for Contingencies." This
    amount, which relates to former manufactured gas plant sites, was recorded
    as a deferred debit with the corresponding amount reflected on the
    consolidating balance sheet under the captions, Current Liabilities and
    Deferred Credits and Other Non-Current Liabilities. The deferred debit is a

                                   SJG-10

    regulatory asset under FASB No. 71. The BPU's intent, evidenced by current
    practice, is to allow SJG to recover the deferred costs after they are
    spent.

         SJG files with the BPU to recover these costs in rates through its RAC.
    The BPU has consistently allowed the full recovery over 7-year periods, and
    SJG believes this will continue. As of March 31, 2000, SJG's unamortized
    remediation costs of $17.8 million are reflected on the consolidated balance
    sheet under the caption Regulatory and Other Non-Current Assets.  Since
    implementing the RAC in 1992, SJG recovered $22.5 million through rates as
    of March 31, 2000.

                                   SJG-11

          Item 2.   Management's Discussion and Analysis of Results of
                       Operations and Financial Condition


Overview

     South Jersey Gas Company (SJG) is a natural gas distribution company
serving 276,088 customers at March 31, 2000, compared with 269,108 customers at
March 31, 1999.  SJG also makes off-system sales of natural gas on a wholesale
basis to various customers on the interstate pipeline system and transports
natural gas purchased directly from producers or suppliers for our own sales
and for some of our customers.  South Jersey Industries, Inc. (SJI) owns all of
the common stock of SJG.

Forward Looking Statements

     This report contains certain forward-looking statements concerning
projected financial and operating performance, future plans and courses of
action and future economic conditions.  All statements in this report other
than statements of historical fact are forward-looking statements.  These
forward-looking statements are made based upon management's expectations and
beliefs concerning future events impacting the company and involve a number of
risks and uncertainties.  We caution that forward-looking statements are not
guarantees and actual results could differ materially from those expressed or
implied in the forward-looking statements.  Also, in making forward-looking
statements, we assume no duty to update these statements should expectations
change or actual results and events differ from current expectations.

     A number of factors could cause our actual results to differ materially
from those anticipated, including, but not limited to the following:  general
economic conditions on an international, federal, state and local level;
weather conditions in the company's marketing areas; regulatory and court
decisions; competition in the company's regulated activities; the availability
and cost of capital; costs and effects of legal proceedings and environmental
liabilities; and changes in businesss strategies.

Customer Choice Legislation

     Effective January 1, 2000, all residential natural gas customers in New
Jersey are able to choose their gas supplier under the terms of the Electric
Discount and Energy Competition Act of February 1999.  Commercial and
industrial customers have had the ability to choose gas suppliers since 1987.
SJG's residential customers have been able to choose a gas supplier since April
of 1997 under a pilot program.  As of March 31, 2000, 47,281 SJG residential
customers participated in the program .  Customers' bills are reduced for cost
of gas charges and applicable taxes.  The resulting decrease in SJG's revenues
is offset by a corresponding decrease in gas costs and taxes.  While customer
choice can reduce utility revenues, it does not negatively affect SJG's net
income, financial condition or margins.

                                     SJG-12

Energy Adjustment Clauses

     SJG's BPU approved Temperature Adjustment Clause (TAC) had the
following impacts on 2000 and 1999 first quarter net earnings:

                                                  2000        1999
                                                --------    --------
     TAC Adjustment Increase to Net Income
      ($ in thousands)

           Quarter Ended 3/31                    $1,290      $1,276


     While the revenue and income impacts of TAC adjustments are recorded
as incurred, cash inflows or outflows directly attributable to TAC adjustments
generally do not begin until the next TAC year.  Each TAC year begins
October 1.


Results of Operations - Three Months Ended March 31, 2000
Compared to Three Months Ended March 31, 1999
---------------------------------------------

Operating Revenues

     Revenues increased $11.9 million in the first quarter of 2000 compared
with the prior year period.  The primary reasons for the increase were
increased off-system sales and 6,980 additional customers.  These factors more
than offset revenue reductions due to the continued migration of firm gas sales
to firm transportation.  Note, however, that SJG's tariffs are structured so
that profits are derived from the transportation of gas, not the sale of the
commodity.  Consequently, the switch to firm transportation reduced revenues
but did not impact profitability.

     Weather in the first quarter of 2000 was 1.1% warmer than the prior
year period.  Weather was 7.3% warmer for the first quarter than the 20-year
average.  Revisions to SJG's TAC that became effective in October 1998
significantly reduced the weather related volatility in our revenues.  Revenues
for 2000 will be closely tied to the 20-year normal temperatures and not actual
weather conditions.

     The following is a comparison of operating revenue and throughput for
the three month period ended March 31, 2000 vs. the same period ended
March 31, 1999.

                                     SJG-13


                                                         1st Quarter
                                                         -----------
                                                    2000          1999
                                                  --------      --------
     Operating Revenues (Thousands):
       Firm
         Residential                              $70,673        72,536
         Commercial                                16,280        16,185
         Industrial                                 2,000         1,811
         Cogeneration & Electric Generation         1,222           667
         Firm Transportation                       14,012        10,831
                                                  --------      --------
           Total Firm Operating Revenues          104,187       102,030

       Interruptible                                  499           340
       Interruptible Transportation                   484           533
       Off-System                                  39,226        30,486
       Capacity Release & Storage                   1,861           874
       Other                                          745           819
                                                 ---------     ---------

           Total Operating Revenues              $147,002      $135,082
                                                 =========     =========

     Throughput (MMcf):
       Firm
         Residential                                8,481         8,883
         Commercial                                 2,166         2,216
         Industrial                                   106           122
         Cogeneration & Electric Generation           138            71
         Firm Transportation                        8,465         6,789
                                                  --------      --------
           Total Firm Throughput                   19,356        18,081

       Interruptible                                   49           107
       Interruptible Transportation                   840         1,103
       Off-System                                  12,070        14,314
       Capacity Release & Storage                  10,539         3,321
                                                  --------      --------

            Total Throughput                       42,854        36,926
                                                  ========      ========


Gas Purchased for Resale

     Gas purchased for resale increased $10.1 million for the first quarter
of 2000 compared with the same period in 1999 due principally to increased
sales volumes, particularly to off-system customers.  SJG's gas cost during the
first three months of 2000 averaged $2.87/dt compared with $1.96/dt in 1999.
However, changes in gas costs do not directly effect Gas Purchased for Resale.
Fluctuations in gas costs not reflected in current rates are deferred and
addressed in future periods under a BPU approved Levelized Gas Adjustment
Clause (LGAC).  Under the LGAC, fluctuations in gas costs not covered currently
are reflected in future customer rates.  Gas supply sources include contract
and open-market purchases.  SJG secures and maintains its own gas supplies to
serve its customers.

                                     SJG-14

Operations

     A summary of net changes in Utility Operations and Other Operations (in
thousands):

                                                Three Months Ended
                                                     March 31,
                                                   2000 vs. 1999
                                                   -------------

          Other Production Expense                        $1
          Transmission                                   (10)
          Distribution                                   139
          Customer Accounts and Services                 285
          Sales                                           20
          Administration and General                     216
          Other                                          (22)
                                                      -------
                                                        $629
                                                      =======


     Customer Accounts and Services costs increased in the first quarter of
2000 due to temporarily increased staffing levels necessary to handle high call
volumes related to the deregulation process in New Jersey and higher bad debt
expense.  Administrative and General costs increased for the three month
period from 1999 levels principally due to a change in the way management fees
are being charged from SJI to its subsidiaries.

Other Operating Expenses

     A summary of principal changes in other consolidated operating expenses
(in thousands):

                                           Three Months Ended
                                                March 31,
                                              2000 vs. 1999
                                              -------------

               Maintenance                       $1,488
               Depreciation                         309
               Income Taxes                        (110)
               Other Taxes                         (121)


     Maintenance is higher due to higher levels of Remediation Adjustment
Clause (RAC) amortization.  This additional amortization expense is recovered
during the current period through rates (See Regulatory Matters).  Depreciation
is higher due to increased investment in property, plant and equipment by SJG.

                                     SJG-15

Interest Charges

     Interest charges were flat in the first quarter of 2000 compared with
the prior year period.  Increased debt outstanding and higher interest rates
in 2000 were largely offset by recoveries of carrying costs associated with
unrecovered RAC and purchased gas costs.  The debt was incurred primarily to
support the expansion and upgrade of SJG's gas transmission and distribution
system.

Net Income Applicable to Common Stock

     The details affecting the changes in net income and earnings per share
are discussed under the appropriate captions above.

Liquidity

     The seasonal nature of gas operations; the timing of construction and
remediation expenditures and related permanent financing; as well as mandated
tax and sinking fund payment dates require large, short-term cash requirements.
These requirements are generally met by cash from operations and short-term
lines of credit.  We maintain short-term lines of credit with a number of
banks, totaling $130.0 million, of which $48.0 million was available at
March 31, 2000.  The credit lines are uncommitted and unsecured with interest
rates typically available based upon the Federal Funds Rates or London
Interbank Offered Rates (LIBOR).

     The changes in cash flows from operating activities (in thousands):

                                                Three Months Ended
                                                     March 31,
                                                   2000 vs. 1999
                                                   -------------
     Increases/(Decreases):
     Net Income Applicable to Common Stock              ($424)
     Depreciation and Amortization                        828
     Provision for Losses on Accounts Receivable            9
     Revenues and Fuel Costs Deferred - Net            (5,850)
     Deferred and Non-Current Income Taxes and
      Credits - Net                                       932
     Environmental Remediation Costs-Net                1,534
     Accounts Receivable                                4,212
     Inventories                                          806
     Prepayments and Other Current Assets                   0
     Prepaid and Accrued Taxes - Net                   (7,217)
     Accounts Payable and Other Accrued Liabilities       825
     Other - Net                                       (1,832)
                                                      -------
           Net Cash Provided by Operating
            Activities                                ($6,177)
                                                      =======

                                     SJG-16

     Depreciation and Amortization are non-cash charges to income and do not
impact cash flow.  Changes in depreciation cost reflect the effect of additions
and reductions to fixed assets.

     Decreases in Revenues and Fuel Costs Deferred - Net reflect the impact
of payments or credits to customers for amounts previously overcollected and
the undercollection of fuel costs resulting from increases in natural gas
costs.  Increases reflect the overcollection of fuel costs or the recovery of
previously deferred fuel costs.

     Changes in Deferred and Non-Current Income Taxes and Credits - Net
represent the differences between taxes accrued and amounts paid.  Generally,
deferred income taxes related to deferred fuel costs will be paid in the next
year.

     Changes in Environmental Remediation Costs - Net represent the differences
between amounts expended for environmental remediation compared with amounts
collected under the RAC and insurance recoveries.

     Changes in Accounts Receivable are primarily due to changes in off-system
sales activity and SJG's sales volumes.  Weather and commodity prices are the
ariables that primarily impact these sales.  Changes impact cash flows when
collected in subsequent periods.

     Changes in Inventories reflect the impact of seasonal requirements,
temperatures and commodity price changes.

     Changes in Prepaid and Accrued Taxes - Net reflect the impact of
differences between taxes paid and taxes accrued.  Significant timing
differences exist in cash flows during the year.  Approximately 50% of SJG's
taxes are paid in installments during the first half of the year and the
remaining 50% are paid on May 15 of each year.  SJG uses short-term borrowings
to pay taxes, resulting in a temporary increase in the short-term debt level.
The carrying costs of timing differences are recognized in base utility rates.

     Changes in Accounts Payable and Other Current Liabilities reflect the
impact of timing differences between the accrual and payment of costs.

     Changes in Other - Net reflect numerous changes in noncurrent assets
and liabilities, including accrued deferred income taxes.

Regulatory Matters

     Rate Actions

     In February 1999, the Electric Discount and Energy Competition Act (the
Act) was signed into law in New Jersey.  This bill created the framework and
necessary time schedules for the restructuring of the state's electric and
natural gas utilities.  The Act established unbundling, where redesigned
utility rate structures allow natural gas and electric consumers to choose
their energy supplier.  It also established time frames for instituting

                                     SJG-17

competitive services for customer accounting functions and to determine
whether basic gas supply services should become competitive.

     SJG received BPU approval of its unbundling settlement in January 2000.
In addition to allowing all customers to select their own gas supplier, the
approval incented customers to choose a supplier other than SJG with a Market
Development Credit (MDC).  This credit is available to customers through
December 2001.  The credit, approximately $2.5 million plus carrying costs,
appears on our books as a Deferred Credit.  Therefore, the MDC will not
materially impact future periods.

     The unbundling settlement also provided SJG with the ability to recover
carrying costs on unrecovered remediation costs under the RAC, while holding
the current RAC rate in effect through October 2002.  Our RAC rate last changed
in September 1999.  SJG's LGAC was also modified by the unbundling process.
Under-recovered gas costs of $11.9 million as of October 31, 1999, and related
carrying costs, will be recovered over 3 years.  The LGAC for the period
starting November 1999, continues to operate as it has in the past.

     The Act also contains numerous provisions requiring the BPU to
promulgate and adopt a variety of standards related to implementing the Act.
These required standards address fair competition, affiliate relations,
accounting, competitive services, supplier licensing, consumer protection and
aggregation.  In March 2000, the BPU issued Interim Standards in response to
the Act.  We believe the standards will not have a material adverse affect on
the company.

     Other matters are incorporated by reference to Note 3 to the condensed
consolidated financial statements included as part of this report.

Capital Resources

     SJG has a continuing need for cash resources and capital, primarily to
invest in new and replacement facilities and equipment and for environmental
remediation costs.  Net construction and remediation expenditures for the first
three months of 2000 amounted to $2.1 million.  The costs for 2000, 2001 and
2002 are estimated at approximately $49.8 million, $45.5 million and $51.9
million, respectively.  We will fund these expenditures from several sources,
which may include cash generated by operations, temporary use of short-term
debt, sale of medium-term notes, capital leases, RAC recoveries, insurance
recoveries and equity infusions from SJI.


                                     SJG-18


                          PART II    OTHER INFORMATION


Item l.  Legal Proceedings

     Information required by this Item is incorporated by reference to Part
I, Item 1, Note 5, beginning on page 10.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

     The company has interest rate risk exposure related to short-term debt.
For information regarding SJG's exposure related to market risk, see Item 7A in
SJG's most recently filed Form 10-K.  SJG's market risks have not materially
changed from December 31, 1999.

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits

          Exhibit 27              Financial Data Schedule (submitted only in
                                  electronic format to the Securities and
                                  Exchange Commission).



                                     SJG-19


                                   SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                            SOUTH JERSEY GAS COMPANY
                                  (Registrant)



    Dated:  May 15, 2000          By:   /s/ David A. Kindlick
                                        David A. Kindlick
                                        Senior Vice President, Finance & Rates





    Dated:  May 15, 2000          By:   /s/ William J. Smethurst, Jr.
                                        William J. Smethurst, Jr.
                                        Vice President and Treasurer


                                     SJG-20


                            SOUTH JERSEY GAS COMPANY

                               Index to Exhibits



           Exhibit Number                        Description
           --------------                        -----------

                 27                Financial Data Schedule

                                   (Submitted only in electronic format to the
                                   Securities and Exchange Commission).



                                     SJG-21
{"company-data": {"conformed-name": "SOUTH JERSEY GAS CO/NEW", "cik": "0001035216", "assigned-sic": "4923", "irs-number": "210398330", "state-of-incorporation": "NJ", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-22211", "film-number": "633098"}, "business-address": {"street1": "NUMBER ONE SOUTH JERSEY PLAZA", "street2": "ROUTE 54", "city": "FOLSOM", "state": "NJ", "zip": "08037", "phone": "6095619000"}, "mail-address": {"street1": "NUMBER ONE SOUTH JERSEY PLAZA", "street2": "ROUTE 54", "city": "FOLSOM", "state": "NJ", "zip": "08037"}}
Page 1 of 21

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549
                                   FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

 For the Quarter Ended March 31, 2000            Commission File Number 1-12899

                            SOUTH JERSEY GAS COMPANY
             (Exact name of registrant as specified in its charter)

             New Jersey                             22-0398330
      (State of incorporation)          (IRS employer identification no.)

                    1 South Jersey Plaza, Folsom, NJ  08037
          (Address of principal executive offices, including zip code)

                                 (609) 561-9000
              (Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                             Yes  [X]      No  [  ]

As of May 5, 2000 there were 2,339,139 shares of the registrant's common stock
outstanding.  All common shares are owned by South Jersey Industries, Inc., the
parent company of South Jersey Gas Company.

                            Exhibit Index on page 21

                                 - Title Page -

                        PART I    FINANCIAL INFORMATION

            Item 1.  Financial Statements -- See Pages 3 through 11

                                     SJG-2

                          SOUTH JERSEY GAS COMPANY AND SUBSIDIARY

                   CONDENSED STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED)
                          (In Thousands Except for Per Share Data)
Three Months Ended
                                                            March 31,
                                                    ------------------------
                                                       2000          1999
                                                    ----------    ----------
Operating Revenues:
  Utility                                            $146,627      $134,587
  Other                                                   375           495
                                                    ----------    ----------
      Total Operating Revenues                        147,002       135,082
                                                    ----------    ----------
Operating Expenses:
  Gas Purchased for Resale                             88,818        78,674
  Utility Operations                                    9,811         9,160
  Other Operations                                        348           370
  Maintenance                                           2,770         1,282
  Depreciation                                          4,920         4,611
  Income Taxes                                         12,608        12,718
  Other Taxes                                           4,335         4,456
                                                    ----------    ----------
      Total Operating Expenses                        123,610       111,271
                                                    ----------    ----------

Operating Income                                       23,392        23,811

Interest Charges:
  Long-Term Debt                                        3,833         4,107
  Short-Term Debt and Other                             1,194           914
                                                    ----------    ----------
      Total Interest Charges                            5,027         5,021

Income Before Preferred Dividend Requirements          18,365        18,790
Preferred Stock Dividend Requirements                      40            41
Preferred Securities Dividend Requirements                731           731
                                                    ----------    ----------

Net Income Applicable to Common Stock                 $17,594       $18,018
                                                    ==========    ==========

Average Shares of Common Stock Outstanding              2,339         2,339
                                                    ==========    ==========

Earnings Per Common Share                               $7.52         $7.70
                                                    ==========    ==========

Dividends Declared Per Common Share                     $1.80         $1.73
                                                    ==========    ==========
The accompanying footnotes are an integral part of the financial statements.
SJG-3

                    SOUTH JERSEY GAS COMPANY AND SUBSIDIARY

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                               (In Thousands)
(Unaudited)
                                                                          March 31,         December 31,
                                                                  -----------------------   -------------
                                                                     2000         1999          1999
                                                                  ----------   ----------   -------------
Assets
------
Property, Plant and Equipment:
   Utility Plant, at original cost                                 $729,901     $691,669        $721,338
     Accumulated Depreciation                                      (195,958)    (183,041)       (192,240)
   Gas Plant Acquisition Adjustment - Net                             1,757        1,832           1,776
                                                                  ----------   ----------   -------------
          Property, Plant and Equipment - Net                       535,700      510,460         530,874
                                                                  ----------   ----------   -------------
Available-for-Sale Securities                                         1,701          886           1,662
                                                                  ----------   ----------   -------------
Current Assets:
   Cash and Cash Equivalents                                            335        1,552           4,694
   Accounts Receivable                                               61,552       53,848          37,066
   Unbilled Revenues                                                 15,557       16,862          21,294
   Provision for Uncollectibles                                        (860)        (932)           (932)
   Natural Gas in Storage, average cost                              10,182       11,864          26,840
   Materials and Supplies, average cost                               3,952        3,821           4,085
   Prepaid Taxes                                                          -            -           4,069
   Prepayments and Other Current Assets                               2,254        2,060           2,461
                                                                  ----------   ----------   -------------
          Total Current Assets                                       92,972       89,075          99,577
                                                                  ----------   ----------   -------------
Accounts Receivable - Merchandise                                       599          903             684
                                                                  ----------   ----------   -------------
Regulatory and Other Non-Current Assets:
   Environmental Remediation Costs:
     Expended - Net                                                  17,840       21,679          25,702
     Liability for Future Expenditures                               51,029       52,939          51,029
   Gross Receipts and Franchise Taxes                                 3,030        3,474           3,141
   Income Taxes - Flowthrough Depreciation                           11,286       12,264          11,531
   Deferred Fuel Cost - Net                                           6,517             -         13,174
   Deferred Postretirement Benefit Costs                              4,820        5,365           4,914
   Other                                                              6,734        8,401           7,951
                                                                  ----------   ----------   -------------
          Total Regulatory and Other Non-Current Assets             101,256      104,122         117,442
                                                                  ----------   ----------   -------------
               Total Assets                                        $732,228     $705,446        $750,239
                                                                  ==========   ==========   =============
The accompanying footnotes are an integral part of the financial statements.
SJG-4

                   SOUTH JERSEY GAS COMPANY AND SUBSIDIARY

                    CONDENSED CONSOLIDATED BALANCE SHEETS
                               (In Thousands)
(Unaudited)
                                                                         March 31,          December 31,
                                                                  -----------------------   -------------
                                                                     2000         1999          1999
                                                                  ----------   ----------   -------------
Capitalization and Liabilities
------------------------------
Common Equity:
  Common Stock, Par Value $2.50 per share:
    Authorized - 4,000,000 shares
    Outstanding - 2,339,139 shares                                   $5,848       $5,848          $5,848
  Other Paid-In Capital and Premium on Common Stock                 117,817      102,817         117,817
  Retained Earnings                                                  71,851       68,243          58,457
                                                                  ----------   ----------   -------------
      Total Common Equity                                           195,516      176,908         182,122
                                                                  ----------   ----------   -------------
Preferred Stock and Securities:
  Redeemable Cumulative Preferred  -  Par Value $100 per share,
  Authorized 45,504,46,404 and 45,504 shares, respectively
  Outstanding:
    Series A, 4.70% -  1,200, 2,100 and 1,200 shares                    120          210             120
    Series B, 8.00% - 19,242 shares                                   1,924        1,924           1,924
  Company-Guaranteed Mandatorily Redeemable
   Preferred Securities of Subsidiary Trust
   Par Value $25 per share, 1,400,000 shares
   Authorized and Outstanding                                        35,000       35,000          35,000
                                                                  ----------   ----------   -------------
      Total Preferred Stock and Securities                           37,044       37,134          37,044
                                                                  ----------   ----------   -------------
Long-Term Debt                                                      181,373      192,523         183,561
                                                                  ----------   ----------   -------------
        Total Capitalization                                        413,933      406,565         402,727
                                                                  ----------   ----------   -------------
Current Liabilities:
  Notes Payable                                                      82,000       59,000         118,900
  Current Maturities of Long-Term Debt                                8,876        8,876           8,876
  Accounts Payable                                                   28,739       31,179          34,822
  Customer Deposits                                                   5,462        5,506           5,386
  Environmental Remediation Costs                                    12,534        8,752          12,534
  Taxes Accrued                                                      15,729       15,172             634
  Interest Accrued and Other Current Liabilities                      7,955        7,675          10,422
                                                                  ----------   ----------   -------------
      Total Current Liabilities                                     161,295      136,160         191,574
                                                                  ----------   ----------   -------------
Deferred Credits and Other Non-Current Liabilities:
  Deferred Income Taxes - Net                                        94,467       86,789          93,543
  Environmental Remediation Costs                                    38,495       44,187          38,495
  Pension and Other Postretirement Benefits                          12,705       13,767          12,303
  Investment Tax Credits                                              4,757        5,141           4,849
  Deferred Revenues - Net                                                 -        7,505               -
  Other                                                               6,576        5,332           6,748
                                                                  ----------   ----------   -------------
      Total Deferred Credits and Other Non-Current Liabilities      157,000      162,721         155,938
                                                                  ----------   ----------   -------------
Commitments and Contingencies

        Total Capitalization and Liabilities                       $732,228     $705,446        $750,239
                                                                  ==========   ==========   =============
The accompanying footnotes are an integral part of the financial statements.
SJG-5

                    SOUTH JERSEY GAS COMPANY AND SUBSIDIARY

          CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
                                (In Thousands)
Three Months Ended
                                                                              March 31,
                                                                     -------------------------
                                                                        2000           1999
                                                                     ----------     ----------
Cash Flows from Operating Activities:
  Net Income Applicable to Common Stock                                $17,594        $18,018

  Adjustments to Reconcile Net Income to Cash Flows
   Provided by Operating Activities:
    Depreciation and Amortization                                        5,829          5,001
    Provision for Losses on Accounts Receivable                             72             63
    Revenues and Fuel Costs Deferred - Net                               6,657         12,507
    Deferred and Non-Current Income Taxes and Credits - Net              1,029             97
    Environmental Remediation Costs - Net                                7,862          6,328
    Changes in:
      Accounts Receivable                                              (18,893)       (23,105)
      Inventories                                                       16,791         15,985
      Prepayments and Other Current Assets                                 207            207
      Prepaid and Accrued Taxes - Net                                   19,164         26,381
      Accounts Payable and Other Accrued Liabilities                    (8,474)        (9,299)
    Other - Net                                                          1,067          2,899
                                                                     ----------     ----------
        Net Cash Provided by Operating Activities                       48,905         55,082
                                                                     ----------     ----------
Cash Flows from Investing Activities:
  Purchase of Available-for-Sale Securities                                (39)             -
  Capital Expenditures, Cost of Removal and Salvage                     (9,937)       (13,044)
                                                                     ----------     ----------
        Net Cash Used in Investing Activities                           (9,976)       (13,044)
                                                                     ----------     ----------
Cash Flows from Financing Activities:
  Net Repayments of Lines of Credit                                    (36,900)       (38,000)
  Principal Repayments of Long-Term Debt                                (2,188)        (2,187)
  Dividends on Common Stock                                             (4,200)        (4,050)
                                                                     ----------     ----------
        Net Cash Used in Financing Activities                          (43,288)       (44,237)
                                                                     ----------     ----------
Net Decrease in Cash and Cash Equivalents                               (4,359)        (2,199)
Cash and Cash Equivalents at Beginning of Period                         4,694          3,751
                                                                     ----------     ----------
Cash and Cash Equivalents at End of Period                                $335         $1,552
                                                                     ==========     ==========
The accompanying footnotes are an integral part of the financial statements.
SJG-6

              Notes To Condensed Consolidated Financial Statements
                                   (Unaudited)

Note 1.  Significant Accounting Practices:

         Consolidation - The consolidated financial statements include the
    accounts of South Jersey Gas Company (SJG) and its wholly-owned statutory
    trust subsidiary, SJG Capital Trust.  All significant intercompany accounts
    and transactions were eliminated.  SJG reclassified some previously reported
    amounts to conform with current year classifications.  In the company's
    opinion, the condensed consolidated financial statements reflect all
    adjustments needed to fairly present SJG's financial position and operating
    results at the dates and for the periods presented.  SJG's businesses are
    subject to seasonal fluctuations and, accordingly, this interim financial
    information should not be the basis for estimating the full year's operating
    results.

         South Jersey Industries, Inc. (SJI) owns all of the outstanding common
    stock of SJG.

         Estimates and Assumptions - Our financial statements are prepared to
    conform with generally accepted accounting principles.  Management makes
    estimates and assumptions that affect the amounts reported in the financial
    statements and related disclosures.  Therefore, actual results could differ
    from those estimates.

         New Accounting Pronouncement - In June 1998, the Financial Accounting
    Standards Board (FASB) issued Statement No. 133, "Accounting for Derivative
    Instruments and Hedging Activities," which is effective for the first
    quarter of our fiscal year ending December 31, 2001.  This statement
    establishes accounting and reporting standards for derivative instruments,
    including those embedded in other contracts, and for hedging activities.  It
    requires recognizing derivatives as assets or liabilities at fair value on
    the balance sheet.  We are currently evaluating the effects of FASB No. 133
    on the Company's financial condition and results of operations, which will
    vary based on our use of derivative instruments at the time of adoption.

Note 2.  Income Taxes:

         The significant components of federal and state income taxes reflected
    in the condensed statements of consolidated income for the three months
    ended March 31, 2000 and 1999 are as follows (in thousands):

                                   SJG-7

                                               Three Months Ended
                                                    March 31,
                                            -----------------------
                                              2000           1999
                                            --------       --------
         Current:
          Federal                           $  8,689       $  9,357
          State                                2,891          3,265
                                            --------       --------
           Total Current                      11,580         12,622

         Deferred:
          Federal                                984            325
          State                                  136           (131)
                                            --------       --------
           Total Deferred                      1,120            194

         Investment Tax Credit                   (92)           (98)
                                            --------       --------
           Net Income Taxes                 $ 12,608       $ 12,718
                                            ========       ========

Note 3.  Recent Regulatory Actions:

         In January 1997, the Board of Public Utilities (BPU) granted SJG a
    total rate increase of $10.3 million. The $6.0 million base rate portion of
    the increase was based on a 9.62% rate of return on rate base, which
    included an 11.25% return on common equity. Additionally, SJG's threshold
    for sharing pre-tax margins generated by interruptible and off-system sales
    and transportation (Sharing Formula) increased from $4.0 million to $5.0
    million. With the completion of major construction projects, this $5.0
    million threshold increased by $2.8 million to a total of $7.8 million.  SJG
    keeps 100% of pre-tax margins up to the threshold level and 20% of such
    margins above that level. In October 1998, the BPU approved a revision to
    the Sharing Formula as part of an agreement to modify SJG's Temperature
    Adjustment Clause (TAC). The revision credits the first $750,000 above the
    current threshold level to the Levelized Gas Adjustment Clause (LGAC)
    customers. Thereafter, SJG keeps 20% of the pre-tax margins as it has
    historically.

         Effective January 10, 2000, the BPU approved full unbundling of SJG's
    system. This allows all natural gas consumers to select their natural gas
    supplier.  As of March 31, 2000, 47,281 of SJG's residential customers had
    elected to purchase their gas commodity from someone other than us.  The
    bills of those using a gas supplier other than SJG are reduced for cost of
    gas charges and applicable taxes. The resulting decrease in revenues is
    offset by a corresponding decrease in gas costs and taxes under SJG's BPU-
    approved fuel clause.  SJI's net income, financial condition and margins are
    not affected.

                                   SJG-8

         In June 1998, SJG filed a petition with the BPU requesting a change to
    the TAC. The request was granted in October 1998. As a result, SJG
    experiences reduced fluctuations in income when weather is warmer or colder
    than normal.

         In August 1998, SJG filed with the BPU to recover increased remediation
    costs expended from August 1995 through July 1998.  In September 1999, the
    BPU approved the requested annual recovery level of $6.5 million. This
    represents an annual increase of approximately $4.5 million over the
    recovery previously included in rates. In July 1999, SJG filed its annual
    RAC with the BPU requesting recovery of carrying costs on unrecovered
    remediation costs and proposed no change in the current RAC rate for the
    next 3 years. In January 2000, the BPU approved the recovery of carrying
    costs on unrecovered remediation costs and SJG's proposal to keep its
    current RAC rate in effect through October 2002.

         In September 1998, SJG filed its annual LGAC, TAC and Demand Side
    Management Clause (DSMC) with the BPU. The LGAC and DSMC cover the period
    November 1 through October 31 of each year. The TAC period runs from October
    1 through May 31. In May 1999, the BPU approved a $7.1 million increase in
    rates as part of this filing, which included the results of the previous two
    annual filings. In April 2000, SJG made a TAC and LGAC filing and
    anticipates making TAC, LGAC and DSMC filings during the summer of 2000.

         In February 1999, the Electric Discount and Energy Competition Act
    became law. This law established unbundling, where redesigned utility rate
    structures allow natural gas and electric consumers to choose their energy
    supplier. SJG filed its unbundling proposal in April 1999 and received BPU
    approval of its settlement in January 2000.

         In addition to allowing all customers to select their own supplier
    effective January 10, 2000, the unbundling settlement also created an
    incentive to customers to select a supplier, other than SJG, in the form of
    a Market Development Credit (MDC). This credit will be provided to
    customers over the next two years and will approximate $2.5 million plus
    carrying costs through December 2001. The majority of this credit was
    provided for on SJG's books as a Deferred Credit. Therefore, the MDC will
    not materially impact future periods.

         Also included in the settlement was the approved recovery of carrying
    costs on the RAC, as previously discussed, and a modification to SJG's LGAC.
    Under-recovered gas costs of $11.9 million as of October 31, 1999, and
    carrying costs thereon, will be recovered over 3 years. The LGAC for the
    period starting November 1999, will continue to operate as it has in the
    past.

                                   SJG-9

Note 4.  Retained Earnings:

         Restrictions exist under various loan agreements regarding the amount
    of cash dividends or other distributions that we may pay on SJG's common
    stock.  SJG's retained earnings, which is free of these restrictions, was
    approximately $65.8 million as of March 31, 2000.

Note 5.  Commitments and Contingencies:

         Construction Commitments - The estimated net cost of construction and
     environmental remediation programs of SJG for 2000 totals $49.8 million.
     Commitments were made regarding these programs.

         Pending Litigation - SJG is subject to claims arising in the ordinary
    course of business and other legal proceedings.  We set up reserves when
    these claims become apparent.  We also maintain insurance and record
    probable insurance recoveries relating to outstanding claims.

         Environmental Remediation Costs - SJG incurred and recorded costs for
    environmental clean up of sites where SJG or its predecessors operated gas
    manufacturing plants.  SJG stopped manufacturing gas in the 1950s.

         Since the early 1980s, SJG recorded environmental remediation costs of
    $109.1 million, of which $58.1 million was spent as of March 31, 2000.  With
    the assistance of an outside consulting firm, we estimate that future costs
    to clean up SJG's sites will range from $51.0 million to $161.3 million.  We
    recorded the lower end of this range as a liability. It is reflected on the
    2000 consolidated balance sheet under the captions Current Liabilities and
    Deferred Credits and Other Non-Current Liabilities. SJG did not adjust the
    accrued liability for future insurance recoveries, which we have been
    successful in pursuing. We used these proceeds to offset related legal fees
    and to reduce the balance of deferred environmental remediation costs.
    Recorded amounts include estimated costs based on projected investigation
    and remediation work plans using existing technologies.  Actual costs could
    differ from the estimates due to the long-term nature of the projects,
    changing technology, government regulations and site-specific requirements.

         SJG has two regulatory assets associated with environmental cost.  The
    first asset is titled Environmental Remediation Cost: Expended -Net.  These
    expenditures represent what was actually spent to clean up former gas
    manufacturing plant sites. These costs  meet the requirements of FASB No.
    71, "Accounting for the Effects of Certain Types of Regulation." The BPU
    allows SJG to recover expenditures through July 1998 and petitions to
    recover costs through July 1999 are pending.

         The other asset titled Environmental Remediation Cost: Liability for
    Future Expenditures relates to estimated future expenditures determined
    under the guidance of FASB No. 5, "Accounting for Contingencies." This
    amount, which relates to former manufactured gas plant sites, was recorded
    as a deferred debit with the corresponding amount reflected on the
    consolidating balance sheet under the captions, Current Liabilities and
    Deferred Credits and Other Non-Current Liabilities. The deferred debit is a

                                   SJG-10

    regulatory asset under FASB No. 71. The BPU's intent, evidenced by current
    practice, is to allow SJG to recover the deferred costs after they are
    spent.

         SJG files with the BPU to recover these costs in rates through its RAC.
    The BPU has consistently allowed the full recovery over 7-year periods, and
    SJG believes this will continue. As of March 31, 2000, SJG's unamortized
    remediation costs of $17.8 million are reflected on the consolidated balance
    sheet under the caption Regulatory and Other Non-Current Assets.  Since
    implementing the RAC in 1992, SJG recovered $22.5 million through rates as
    of March 31, 2000.

                                   SJG-11

          Item 2.   Management's Discussion and Analysis of Results of
                       Operations and Financial Condition

Overview

     South Jersey Gas Company (SJG) is a natural gas distribution company
serving 276,088 customers at March 31, 2000, compared with 269,108 customers at
March 31, 1999.  SJG also makes off-system sales of natural gas on a wholesale
basis to various customers on the interstate pipeline system and transports
natural gas purchased directly from producers or suppliers for our own sales
and for some of our customers.  South Jersey Industries, Inc. (SJI) owns all of
the common stock of SJG.

Forward Looking Statements

     This report contains certain forward-looking statements concerning
projected financial and operating performance, future plans and courses of
action and future economic conditions.  All statements in this report other
than statements of historical fact are forward-looking statements.  These
forward-looking statements are made based upon management's expectations and
beliefs concerning future events impacting the company and involve a number of
risks and uncertainties.  We caution that forward-looking statements are not
guarantees and actual results could differ materially from those expressed or
implied in the forward-looking statements.  Also, in making forward-looking
statements, we assume no duty to update these statements should expectations
change or actual results and events differ from current expectations.

     A number of factors could cause our actual results to differ materially
from those anticipated, including, but not limited to the following:  general
economic conditions on an international, federal, state and local level;
weather conditions in the company's marketing areas; regulatory and court
decisions; competition in the company's regulated activities; the availability
and cost of capital; costs and effects of legal proceedings and environmental
liabilities; and changes in businesss strategies.

Customer Choice Legislation

     Effective January 1, 2000, all residential natural gas customers in New
Jersey are able to choose their gas supplier under the terms of the Electric
Discount and Energy Competition Act of February 1999.  Commercial and
industrial customers have had the ability to choose gas suppliers since 1987.
SJG's residential customers have been able to choose a gas supplier since April
of 1997 under a pilot program.  As of March 31, 2000, 47,281 SJG residential
customers participated in the program .  Customers' bills are reduced for cost
of gas charges and applicable taxes.  The resulting decrease in SJG's revenues
is offset by a corresponding decrease in gas costs and taxes.  While customer
choice can reduce utility revenues, it does not negatively affect SJG's net
income, financial condition or margins.

                                     SJG-12

Energy Adjustment Clauses

     SJG's BPU approved Temperature Adjustment Clause (TAC) had the
following impacts on 2000 and 1999 first quarter net earnings:

                                                  2000        1999
                                                --------    --------
     TAC Adjustment Increase to Net Income
      ($ in thousands)

           Quarter Ended 3/31                    $1,290      $1,276

     While the revenue and income impacts of TAC adjustments are recorded
as incurred, cash inflows or outflows directly attributable to TAC adjustments
generally do not begin until the next TAC year.  Each TAC year begins
October 1.

Results of Operations - Three Months Ended March 31, 2000
Compared to Three Months Ended March 31, 1999
---------------------------------------------

Operating Revenues

     Revenues increased $11.9 million in the first quarter of 2000 compared
with the prior year period.  The primary reasons for the increase were
increased off-system sales and 6,980 additional customers.  These factors more
than offset revenue reductions due to the continued migration of firm gas sales
to firm transportation.  Note, however, that SJG's tariffs are structured so
that profits are derived from the transportation of gas, not the sale of the
commodity.  Consequently, the switch to firm transportation reduced revenues
but did not impact profitability.

     Weather in the first quarter of 2000 was 1.1% warmer than the prior
year period.  Weather was 7.3% warmer for the first quarter than the 20-year
average.  Revisions to SJG's TAC that became effective in October 1998
significantly reduced the weather related volatility in our revenues.  Revenues
for 2000 will be closely tied to the 20-year normal temperatures and not actual
weather conditions.

     The following is a comparison of operating revenue and throughput for
the three month period ended March 31, 2000 vs. the same period ended
March 31, 1999.

                                     SJG-13

                                                         1st Quarter
                                                         -----------
                                                    2000          1999
                                                  --------      --------
     Operating Revenues (Thousands):
       Firm
         Residential                              $70,673        72,536
         Commercial                                16,280        16,185
         Industrial                                 2,000         1,811
         Cogeneration & Electric Generation         1,222           667
         Firm Transportation                       14,012        10,831
                                                  --------      --------
           Total Firm Operating Revenues          104,187       102,030

       Interruptible                                  499           340
       Interruptible Transportation                   484           533
       Off-System                                  39,226        30,486
       Capacity Release & Storage                   1,861           874
       Other                                          745           819
                                                 ---------     ---------

           Total Operating Revenues              $147,002      $135,082
                                                 =========     =========

     Throughput (MMcf):
       Firm
         Residential                                8,481         8,883
         Commercial                                 2,166         2,216
         Industrial                                   106           122
         Cogeneration & Electric Generation           138            71
         Firm Transportation                        8,465         6,789
                                                  --------      --------
           Total Firm Throughput                   19,356        18,081

       Interruptible                                   49           107
       Interruptible Transportation                   840         1,103
       Off-System                                  12,070        14,314
       Capacity Release & Storage                  10,539         3,321
                                                  --------      --------

            Total Throughput                       42,854        36,926
                                                  ========      ========

Gas Purchased for Resale

     Gas purchased for resale increased $10.1 million for the first quarter
of 2000 compared with the same period in 1999 due principally to increased
sales volumes, particularly to off-system customers.  SJG's gas cost during the
first three months of 2000 averaged $2.87/dt compared with $1.96/dt in 1999.
However, changes in gas costs do not directly effect Gas Purchased for Resale.
Fluctuations in gas costs not reflected in current rates are deferred and
addressed in future periods under a BPU approved Levelized Gas Adjustment
Clause (LGAC).  Under the LGAC, fluctuations in gas costs not covered currently
are reflected in future customer rates.  Gas supply sources include contract
and open-market purchases.  SJG secures and maintains its own gas supplies to
serve its customers.

                                     SJG-14

Operations

     A summary of net changes in Utility Operations and Other Operations (in
thousands):

                                                Three Months Ended
                                                     March 31,
                                                   2000 vs. 1999
                                                   -------------

          Other Production Expense                        $1
          Transmission                                   (10)
          Distribution                                   139
          Customer Accounts and Services                 285
          Sales                                           20
          Administration and General                     216
          Other                                          (22)
                                                      -------
                                                        $629
                                                      =======

     Customer Accounts and Services costs increased in the first quarter of
2000 due to temporarily increased staffing levels necessary to handle high call
volumes related to the deregulation process in New Jersey and higher bad debt
expense.  Administrative and General costs increased for the three month
period from 1999 levels principally due to a change in the way management fees
are being charged from SJI to its subsidiaries.

Other Operating Expenses

     A summary of principal changes in other consolidated operating expenses
(in thousands):

                                           Three Months Ended
                                                March 31,
                                              2000 vs. 1999
                                              -------------

               Maintenance                       $1,488
               Depreciation                         309
               Income Taxes                        (110)
               Other Taxes                         (121)

     Maintenance is higher due to higher levels of Remediation Adjustment
Clause (RAC) amortization.  This additional amortization expense is recovered
during the current period through rates (See Regulatory Matters).  Depreciation
is higher due to increased investment in property, plant and equipment by SJG.

                                     SJG-15

Interest Charges

     Interest charges were flat in the first quarter of 2000 compared with
the prior year period.  Increased debt outstanding and higher interest rates
in 2000 were largely offset by recoveries of carrying costs associated with
unrecovered RAC and purchased gas costs.  The debt was incurred primarily to
support the expansion and upgrade of SJG's gas transmission and distribution
system.

Net Income Applicable to Common Stock

     The details affecting the changes in net income and earnings per share
are discussed under the appropriate captions above.

Liquidity

     The seasonal nature of gas operations; the timing of construction and
remediation expenditures and related permanent financing; as well as mandated
tax and sinking fund payment dates require large, short-term cash requirements.
These requirements are generally met by cash from operations and short-term
lines of credit.  We maintain short-term lines of credit with a number of
banks, totaling $130.0 million, of which $48.0 million was available at
March 31, 2000.  The credit lines are uncommitted and unsecured with interest
rates typically available based upon the Federal Funds Rates or London
Interbank Offered Rates (LIBOR).

     The changes in cash flows from operating activities (in thousands):

                                                Three Months Ended
                                                     March 31,
                                                   2000 vs. 1999
                                                   -------------
     Increases/(Decreases):
     Net Income Applicable to Common Stock              ($424)
     Depreciation and Amortization                        828
     Provision for Losses on Accounts Receivable            9
     Revenues and Fuel Costs Deferred - Net            (5,850)
     Deferred and Non-Current Income Taxes and
      Credits - Net                                       932
     Environmental Remediation Costs-Net                1,534
     Accounts Receivable                                4,212
     Inventories                                          806
     Prepayments and Other Current Assets                   0
     Prepaid and Accrued Taxes - Net                   (7,217)
     Accounts Payable and Other Accrued Liabilities       825
     Other - Net                                       (1,832)
                                                      -------
           Net Cash Provided by Operating
            Activities                                ($6,177)
                                                      =======

                                     SJG-16

     Depreciation and Amortization are non-cash charges to income and do not
impact cash flow.  Changes in depreciation cost reflect the effect of additions
and reductions to fixed assets.

     Decreases in Revenues and Fuel Costs Deferred - Net reflect the impact
of payments or credits to customers for amounts previously overcollected and
the undercollection of fuel costs resulting from increases in natural gas
costs.  Increases reflect the overcollection of fuel costs or the recovery of
previously deferred fuel costs.

     Changes in Deferred and Non-Current Income Taxes and Credits - Net
represent the differences between taxes accrued and amounts paid.  Generally,
deferred income taxes related to deferred fuel costs will be paid in the next
year.

     Changes in Environmental Remediation Costs - Net represent the differences
between amounts expended for environmental remediation compared with amounts
collected under the RAC and insurance recoveries.

     Changes in Accounts Receivable are primarily due to changes in off-system
sales activity and SJG's sales volumes.  Weather and commodity prices are the
ariables that primarily impact these sales.  Changes impact cash flows when
collected in subsequent periods.

     Changes in Inventories reflect the impact of seasonal requirements,
temperatures and commodity price changes.

     Changes in Prepaid and Accrued Taxes - Net reflect the impact of
differences between taxes paid and taxes accrued.  Significant timing
differences exist in cash flows during the year.  Approximately 50% of SJG's
taxes are paid in installments during the first half of the year and the
remaining 50% are paid on May 15 of each year.  SJG uses short-term borrowings
to pay taxes, resulting in a temporary increase in the short-term debt level.
The carrying costs of timing differences are recognized in base utility rates.

     Changes in Accounts Payable and Other Current Liabilities reflect the
impact of timing differences between the accrual and payment of costs.

     Changes in Other - Net reflect numerous changes in noncurrent assets
and liabilities, including accrued deferred income taxes.

Regulatory Matters

     Rate Actions

     In February 1999, the Electric Discount and Energy Competition Act (the
Act) was signed into law in New Jersey.  This bill created the framework and
necessary time schedules for the restructuring of the state's electric and
natural gas utilities.  The Act established unbundling, where redesigned
utility rate structures allow natural gas and electric consumers to choose
their energy supplier.  It also established time frames for instituting

                                     SJG-17

competitive services for customer accounting functions and to determine
whether basic gas supply services should become competitive.

     SJG received BPU approval of its unbundling settlement in January 2000.
In addition to allowing all customers to select their own gas supplier, the
approval incented customers to choose a supplier other than SJG with a Market
Development Credit (MDC).  This credit is available to customers through
December 2001.  The credit, approximately $2.5 million plus carrying costs,
appears on our books as a Deferred Credit.  Therefore, the MDC will not
materially impact future periods.

     The unbundling settlement also provided SJG with the ability to recover
carrying costs on unrecovered remediation costs under the RAC, while holding
the current RAC rate in effect through October 2002.  Our RAC rate last changed
in September 1999.  SJG's LGAC was also modified by the unbundling process.
Under-recovered gas costs of $11.9 million as of October 31, 1999, and related
carrying costs, will be recovered over 3 years.  The LGAC for the period
starting November 1999, continues to operate as it has in the past.

     The Act also contains numerous provisions requiring the BPU to
promulgate and adopt a variety of standards related to implementing the Act.
These required standards address fair competition, affiliate relations,
accounting, competitive services, supplier licensing, consumer protection and
aggregation.  In March 2000, the BPU issued Interim Standards in response to
the Act.  We believe the standards will not have a material adverse affect on
the company.

     Other matters are incorporated by reference to Note 3 to the condensed
consolidated financial statements included as part of this report.

Capital Resources

     SJG has a continuing need for cash resources and capital, primarily to
invest in new and replacement facilities and equipment and for environmental
remediation costs.  Net construction and remediation expenditures for the first
three months of 2000 amounted to $2.1 million.  The costs for 2000, 2001 and
2002 are estimated at approximately $49.8 million, $45.5 million and $51.9
million, respectively.  We will fund these expenditures from several sources,
which may include cash generated by operations, temporary use of short-term
debt, sale of medium-term notes, capital leases, RAC recoveries, insurance
recoveries and equity infusions from SJI.

                                     SJG-18

                          PART II    OTHER INFORMATION

Item l.  Legal Proceedings

     Information required by this Item is incorporated by reference to Part
I, Item 1, Note 5, beginning on page 10.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

     The company has interest rate risk exposure related to short-term debt.
For information regarding SJG's exposure related to market risk, see Item 7A in
SJG's most recently filed Form 10-K.  SJG's market risks have not materially
changed from December 31, 1999.

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits

          Exhibit 27              Financial Data Schedule (submitted only in
                                  electronic format to the Securities and
                                  Exchange Commission).

                                     SJG-19

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                            SOUTH JERSEY GAS COMPANY
                                  (Registrant)

    Dated:  May 15, 2000          By:   /s/ David A. Kindlick
                                        David A. Kindlick
                                        Senior Vice President, Finance & Rates

    Dated:  May 15, 2000          By:   /s/ William J. Smethurst, Jr.
                                        William J. Smethurst, Jr.
                                        Vice President and Treasurer

                                     SJG-20

                            SOUTH JERSEY GAS COMPANY

                               Index to Exhibits

           Exhibit Number                        Description
           --------------                        -----------

                 27                Financial Data Schedule

                                   (Submitted only in electronic format to the
                                   Securities and Exchange Commission).

                                     SJG-21