Estarlio seems to be correct: they didn't use chemical weapons because they feared retaliation in kind. Quoting Wikipedia:

During the war, Germany stockpiled tabun, sarin, and soman but refrained from their use on the battlefield. In total, Germany produced about 78,000 tons of chemical weapons.[2] By 1945 the nation produced about 12,000 tons of tabun and 1,000 pounds (450 kg) of sarin.[2] Delivery systems for the nerve agents included 105 mm and 150 mm artillery shells, a 250 kg bomb and a 150 mm rocket.[2] Even when the Soviets neared Berlin, Adolf Hitler was persuaded not to use tabun as the final trump card. The use of tabun was opposed by Hitler's Minister of Armaments, Albert Speer, who, in 1943, brought IG Farben's nerve agent expert Otto Ambros to report to Hitler. He informed Hitler that the Allies had stopped publication of research into organophosphates (a type of organic compound that emcompasses nerve agents) at the beginning of the war, that the essential nature of nerve gases had been published as early as the turn of the century, and that he believed that Allies could not have failed to produce agents like tabun. This was not in fact the case (Allied research into organophosphates had been kept secret to protect DDT), but Hitler accepted Ambros's deduction, and Germany's tabun arsenal remained unused.

However, one doesn't fear retaliation in kind if one can win with a first strike. Chemical weapons used as bombs would not be that much more effective than firebombing. Atom bombs are far more effective and also easier to deliver and possibly cheaper per city destroyed. Since Hitler (as well as the other sides) accepted the premise that sufficient bombing of enemy civilian populations would cause the enemy to seek terms, if they had had atom bombs and thought their enemies didn't yet have them, they would likely have used them.

IIRC they decided not to use chemical weapons because they were under the impression that the Allies had developed comparable capabilities.