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Business Gas - Your Guide to Lower kWh Rates

Flexible and Efficient Buying Options for all Companies

Natural gas flame

Although most companies use gas as a secondary fuel source, the industry remains hugely competitive. Our proprietary modelling systems provide dynamic intelligence so that all sizes of businesses gain attractive contract options to maintain or reduce costs each year.

We offer a range of flexible and competitive solutions tailored for all types of users together with proactive management of your renewal date.

Only 33% of small and medium-sized enterprises change suppliers annually. Conversely two-thirds or 2.93 million companies are potentially being overcharged.

Average Bills

For those businesses that have gas connections, the following are typical of the annual bills.

  • The average unit price is 2.84p/ kWh with a daily standing charge of 40p per day.
  • A small business using 10,000 kWh each year has an average bill of £430 each year.
  • A medium sized business using 25,000 kWh expects an annual invoice of £856.
  • A larger business consuming 45,000 kWh could see a £1,424 charge per year.

Source:BusinessEnergy.com 2015. All figures exclude VAT at 20% and Climate Change Levies. Prices vary by supplier and UK region. The fixed daily standing charge is usually lower than electricity by 20%.

Calculate your average bills using our online gas calculator.

Wholesale Gas Market Prices

The wholesale price of gas has fallen 19% from its December 2013 peak with 2015 levels stable at an average 42.2p per Therm.

Wholesale gas pricing graph

One Therm is the equivalent to 29.3 kWh, so the price per kWh is 1.44 pence or £0.0144. These are the prices paid by the suppliers excluding any Government levies, VAT, distribution costs, profits and TRANSCO fees.

News and Market Dynamics

Graphic of pricing trends

Pricing fluctuates more in the gas market that is dependent on factors not present in the electricity market.

The National Grid manages overall demand supplying the power companies at source. Reductions occur in the supply of natural gas if demand can be satisfied from other sources such as nuclear or wind farm generation.

The Government is also investing in developing renewable energy sources as well as shale gas from fracking activities.

A separate Climate Change Levy is applied to natural gas from the utility provider at 0.193p per kilowatt hour.

Managing the Tendering Process

Quotations can be obtained online matching your requirements to the right supplier.

Quotes are generated based on consumption levels, the wholesale market, and overall demand. They also vary by UK region and meter type. Quotes can be obtained by entering your premises postcode that is matched automatically to your meter to produce initial results.

The UK Operates a Transparent and Flexible Market

The UK's market is open and transparent since deregulation. Our database contains all supplier to avoid costly deemed or out of contract rates from renewal letters.

In 1990, the UK government privatised the main incumbent supplier opening the entire market to new entrants. This change opened up competition that allowed both homeowners and businesses to choose an alternative supplier. A new regulator was commissioned to oversee and monitor the whole market.

How Can You Lower Your Own Gas Prices?

There are four ways to procure your new contract:

  1. Use a broker service to search the market for you.
  2. Use an online comparison service to find the most popular tariffs.
  3. Stay with your current supplier with expensive renewal prices.
  4. Check out each of the 20 gas providers yourself and select the tariff most suitable.
Switching business gas options

Option three works in the same manner as most other utilities. Your renewal offer is on average 35% to 100% higher than your current contract. These companies hope you'll simply let your contract automatically renew for another one to three years. There are always cheaper alternatives in the marketplace.

Option four takes the most time. You won't necessarily access all the tariffs that some broker's purchasing power provides.

In all cases, changing your contract is entirely your decision.

Related Guides

The following advice guides provide additional information on managing your gas account: