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Gas Prices

Business gas tariffs

As a business owner, you know how important it is to keep your costs under control. One of the best ways of keeping on top of your outgoings is to make sure you’re getting the best value on your business gas. Finding the best deal can be time consuming though, so it makes sense to let the experts lend a hand.

What types of business energy tariffs are available?

Every business has different needs, so there are lots of different types of energy tariffs to cater for this. Broadly speaking, business energy tariffs can either be fixed or variable:

  • Fixed-rate contract: where you pay the same cost per unit (kWh) for your energy for the duration of your contract.
  • Variable-rate contract: where the unit rate you pay can increase and decrease throughout the duration of your contract, depending on market activity.

Whether you’re on a fixed-rate contract or a variable-rate contract, it’s important to keep your eye on the ball. If you let your current deal run out without switching or agreeing to a new one, you could find yourself on one of these less competitive types of contract:

  • Deemed rate contract: also known as an out-of-contract tariff, these are expensive rates arranged by suppliers for customers who don’t have a formally agreed contract.
  • Rollover contract: a very expensive tariff that’s used when you haven’t agreed to a new deal since your previous end date.

Whatever the size of your business, it’s important to keep your costs down, and paying over the odds on an expensive energy tariff swallows up money that could be better spent elsewhere. You can avoid this by switching to a cheaper contract as soon as you can.

How to compare business gas prices per kWh

Comparing business energy tariffs can be complicated, because you have to look at separate quotes for gas and electricity. This makes it harder to work out which deal is the best value for your business. To make it easier, it helps to look at the price per kWh - this makes it easier to compare like for like, so you can be sure you choose the right tariff for you.

The price you pay per kWh can be affected by lots of things, including the size of your business, where your business is based, and how much gas you use. These average rates should give you an idea of what you can expect to pay:

  • A micro business using between 5,000 - 15,000 kWh of gas a year would pay from 4.1p - 4.5p per kWh
  • A small business using between 15,000 - 30,000 kWh of gas a year would pay from 3.8p - 4.0p per kWh
  • A medium business using between 30,000 - 65,000 kWh of gas a year would pay from 3.5p - 3.7p per kWh

What affects the cost of commercial gas rates?

Commercial gas prices can change quickly depending on several factors, including changes in the wholesale price, supply and demand, currency prices, regulator fees and government levies.

These factors can also affect gas rates:

1. Where the gas is stored

If, for example, a gas storage facility closes for any reason (for refurbishment or staff training, for example), then this will put an increased demand on the network, and prices are likely to spike.

2. The weather

When the weather begins to heat up, we tend to turn down the central heating. Warmer weather means there’s less need for a heat supply, and this lower demand means the price of gas will drop. On the other hand, when temperatures drop in the colder months, the price of gas is likely to go up.

3. Gas flow availability

It can be hard to know how much gas is readily available, because gas is bought, sold and transported in vast quantities across large areas, and this uncertainty can affect the wholesale gas price.

For example, when there is more gas being supplied into the UK than is needed, business gas buyers have the advantage, so prices tend to be lower. The more oil there is, the cheaper it is.

How to get the best business gas rates

The best way to save money on commercial gas is to sign a fixed term contract. Most contracts are good for one year and give you a guaranteed price throughout the term of the contract.

Two-year and three-year contracts are also often available with even lower tariffs. But, make sure you check the small print with longer term contracts, as if you want to cancel early it can be very expensive.

Fixed term gas contracts can often be as much as much as 60% cheaper than other plans.

Alternatively, you might want to consider switching to suppliers to an independent company. The best way to do this is to let our energy experts take care of the switch for you, so give us a call on 0800 326 5530 and make sure you have this information to hand:

  • Your MPRN (Meter Point Reference Number)
  • Your annual gas usage (if you know it)
  • When you’re most likely to be using gas
  • Your business electricity usage (if you’re interested in a bundled plan)
  • The date your current contract expires (if you have one)


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