How business gas prices work
Business gas is sold on contracts rather than published tariffs. Each supplier prices a quote for your business based on how much gas you use, where you are and how long you want to fix for. There is no price cap, so two businesses on the same street can pay very different rates.
What makes up your business gas bill
| Charge | What it is |
|---|---|
| Unit rate | The price for each kWh of gas you use, shown in pence per kWh. |
| Standing charge | A fixed daily charge for your supply, paid even when you use no gas. |
| Climate Change Levy | A government environmental tax on business energy. Very low users and charities are usually exempt. |
| VAT | Usually 20% for businesses, or 5% if you qualify. |
Why business gas prices per kWh vary
Your gas price per kWh depends on several things:
- Annual usage. Suppliers price small, medium and large users differently.
- Location. Gas transportation costs vary across the regional distribution zones.
- Contract length. One, two and three year fixes are all priced differently.
- Timing. Prices follow the wholesale gas market, which can move week to week.
- Credit and payment method. Paying by direct debit and having good business credit can help.
This is why averages only tell part of the story. A quote based on your own usage is the only number that really counts.
How to convert your gas meter reading to kWh
Gas meters measure volume, so suppliers convert it to energy before billing you. For a metric meter showing cubic metres, the calculation is:
Units used × 1.02264 × calorific value ÷ 3.6 = kWh
If you have an older imperial meter showing cubic feet, multiply your units by 2.83 first to convert them to cubic metres. Your bill shows the calorific value used for your supply.
Knowing your kWh usage helps you compare quotes accurately and spot billing mistakes.
How to compare business gas quotes
- Find your contract end date and MPRN on your bill or contract.
- Check your annual usage in kWh.
- Ask for quotes on the same contract length so you are comparing like for like.
- Compare the total annual cost, including the standing charge.
- Check notice periods and how the broker is paid.
Out of contract business gas
If your fixed contract ends and you do not renew, your supplier will usually move you to an out of contract or rollover rate. These are often much higher than a fixed deal agreed in advance. If you are already out of contract, you can usually move to a new fixed contract straight away.
Comparing electricity too? See business electricity or our guide to business energy comparison rates.