Saving money has always been important for any growing business, but rising energy prices have made it a crucial task to manage overheads. We work with a panel of trusted UK business gas suppliers to take away the pains of finding great business gas prices – whether you’re renewing with your gas supplier or switching tariff, our award-winning team is here to help.
Should You Compare Your Business Gas Renewal?
It may seem much easier to accept that business gas renewal that your current energy supplier has sent you, but these renewals are often priced higher than average market gas rates.
We have made the process of switching easy, taking away all the time-consuming aspects of switching suppliers away from you. We offer a full gas switching service ensuring everything is switched over with ease. We may even be able to negotiate better business gas rates with your current supplier so you only need to be transferred onto a new tariff.
Who Is The Cheapest Business Gas Supplier?
You can view live business gas rates through our comparison engine. It only takes 60 seconds to complete.
Whilst it’s often difficult to pinpoint a business gas supplier that is the cheapest daily, we can offer an insight into current prices on a certain day. These prices will change daily and can vary based on location, industry and overall consumption. With being said, here are prices based on 25,000 kWh of usage annually.
| Supplier | Price per kWh | Standing Charge |
|---|---|---|
 | 26.3p | 25p |
 | 17.38p | 36.66p |
 | 22.17p | 45p |
 | 17.78p | 38p |
Business Gas Prices Per kWh By By Business Size
The table below reflects the average price paid per kWh by businesses of various sizes (based on consumption levels). It includes the prices with and without Climate Change Levy (CCL) of 0.203 p/kWh but excludes VAT.
| Business Size | Business Gas Unit Price (excluding CCL) (p/kWh) | Business Gas Unit Price (including CCL) (p/kWh) |
|---|---|---|
| Very Small | 5.10p | 5.40p |
| Small | 3.33p | 3.64p |
| Medium | 3.98p | 4.22p |
| Large | 3.53p | 3.70p |
| Very Large | 4.66p | 4.78p |
| Average | 3.95p | 4.18p |
The business gas prices above above are the most recent figures (Q1 2022)
available from GOV.UK.
Businesses were grouped based on their annual gas consumption as follows:
- Very Small – Under 278,000 kWh per year.
- Small – 278,000 – 2,777,000 kWh per year.
- Medium – 2,778,000 – 27,777,000 kWh per year.
- Large – 27,778,000 – 277,777,000 kWh per year.
- Very Large – 277,778,000 – 1,111,112,000 kWh per year.
To put those numbers in perspective, a ‘Large’ business using 277,777,000 kWh of gas per year would end up paying £9 million more for gas if it paid the price paid by the average very small business (5.174 p/kWh) vs the average large business (1.886 p/kWh).
How Can You Save Money On Your Business Gas Prices?
Since our beginnings, we have built strong commercial partnerships with UK’s most trusted business gas suppliers. This helps us gain access to great deals for our customers, and our long trusted presence in the market has allowed us to develop technology that makes the switching process seamless.
We understand time is money and we take all the admin away from switching commercial gas suppliers so you can continue to do what you do best. Of course, there are other ways of increasing your energy efficiency and managing the cost of your gas bill. You can read more about how to save on your business gas here.
Are UK Commercial Gas Prices Increasing?
UK commercial gas prices have increased in line with wholesale energy prices. Between 2020 and 2021, business gas rates have increased by 72%. These prices are seen across all business sizes.
Here are the average gas prices per kWh trends including CCL (Climate Change Levy) available in August 2022.
Source: GOV.UK – prices including CCL.
Why Are Micro Business Gas Prices Higher?
Micro business gas prices are seen as similar to the domestic market so prices are often similar to the domestic market.
Typically, larger businesses will use larger amounts of gas so will be able to demand a lower price per kWh.
According to Ofgem a non-domestic consumer is defined as a micro business if they meet one of the following criteria:
- employs fewer than 10 employees (or their full-time equivalent) and has an annual turnover or balance sheet no greater than €2 million; or
- uses no more than 100,000 kWh of electricity per year; or
- uses no more than 293,000 kWh of gas per year.
The main benefit of being defined as a micro-business rather than a small business is that you can give a termination notice at any time during your contract which means you can always shop for the best deal. Typically, it is much easier to manage your business energy if you’re a micro business but you do pay higher gas rates. This is because they usually have similar flexibility to domestic contracts.
Click here to compare the latest business energy prices.
Do Large Businesses Get Better Commercial Gas Prices?
Large businesses will typically pay a lower price per kWh for their gas as large consumption users. We have specialist advisors for large commercial users as they often need a bespoke energy package with intricate energy management systems. We have a dedicated team for large consumptions customers.
Click here to compare the latest business energy prices.
Should I Choose A Fixed Or Variable Business Gas Tariff?
While both fixed and variable gas contracts are available, most suppliers steer customers towards fixed-price contracts unless they are very sophisticated buyers. Finding a business energy deal that works for you will help you save money on your gas and electricity.
Here are the key things you need to know about both types:
Fixed Tariff Business Gas Contracts:
- Can now be for as long as 5 years, although 1-3 years is more typical
- Fixes your unit price paid per kWh and standing charge for the duration of the contract (but usually excludes changes to CCL)
- The price you pay per unit may increases with contract length because of the risk of price increases
- Fixed price often only applies to estimated usage, which means you could pay more if you start using more energy
- Very difficult to get out of the contract early
Variable Tariff Business Gas Contracts:
- The price you pay varies based on wholesale gas prices and can go up or down
- Cheaper than deemed or out-of-contract rates
- Not usually locked into a long-term contract, so can switch suppliers at any time
- Offers far less certainty than a fixed-term contract in terms of rates
- Prices can sometimes be higher than fixed-term contracts
Most small businesses will probably be better going with a fixed price contract as it offers peace of mind and is one less thing to worry about.
What Are The Business Wholesale Gas Prices Per kWh In 2022?
- Lower gas storage levels in Europe
- Reduced pipeline imports from Russia
Combined together, this has led to higher prices to attract more gas to meet demand.
| Year | Price (p/kWh) |
|---|---|
| 2016 | 2.373p |
| 2017 | 2.168p |
| 2018 | 2.406p |
| 2019 | 2.484p |
| 2020 | 2.470p |
| 2021 | 3.073P |
What Makes Up Your Commercial Gas Bill?
While the wholesale price of gas makes up the bulk of what your business will pay. There are a few other costs to be aware of.
- VAT: Most businesses will pay the standard VAT rate of 20% for their commercial gas. However, if at least 60% of your business’ energy is used for domestic purposes, you are a charity or non-profit, and/or you use less than 145 kWh of gas per day (4,500 kWh per month) you may be able to pay only 5%.
- CCL: From 1 April 2019 the Climate Change Levy is 0.339 p/kWh for gas.
- Local Distribution Zone (LDZ) charges: Levied by Gas Distribution Network (GDN) operators in order to recover their regulated allowed revenue as determined through the RIIO-GD1 network price control.
How To Get Cheaper Gas For Your Business
- The single best way to get the lowest price is to compare suppliers. Services such as Love Energy Savings make this process easy and they even allow you to buy online.
- Know how much gas you use each year and when, as this makes comparisons easier and may make it easier to negotiate a discount.
- Have your MPRN (Meter point reference number) ready as this can also help you make a better comparison.
- Consider how you pay your bill. For example, suppliers like EON and EDFmay offer up to a 7% discount if you pay by monthly direct debit.
- Check your company credit rating. Bad credit can mean you’ll pay more for your gas supply.
- Look into when you use your gas. For example, if your business is seasonal you may be able to benefit from lower summer prices.
- If you have multiple business locations you may be able to negotiate a lower unit price by buying in bulk.
- Energy suppliers don’t offer dual fuel contracts or discounts like they do for domestic customers. This means you may find it cheaper to buy your gas and electricity from separate suppliers.
- Look into installing better insulation in your property. Most gas is used for heating, which means you could reduce your consumption and bills simply by wasting less.
- Look into how efficient your gas boiler is. Older boilers can be real energy hogs, which means upgrading to a brand new one can pay off more quickly than you’d think.
Business Gas FAQs
What Is Climate Change Levy?
Climate Change Levy (CCL) is a tax charge based on how much energy businesses use. This environmental tax was introduced to encourage businesses to become more energy efficient.
What Are Deemed Rate Contracts?
Business gas customers do not currently benefit from Ofgem’s price cap. This means customers not under contract can end up paying a lot more for their gas than those under contract. It’s important to regularly compare business gas tariffs to ensure your business is in the best position to save money.
It is actually quite difficult to end up in this situation as most suppliers will at least try to roll you over onto a variable rate contract when it expires. Regardless, keeping an eye on your contract end date for your business gas will place all the control in your hands.
Deemed rates: are what businesses taking over new premises will pay until they enter into a gas supply contract. The amount is paid to the existing energy supplier of the premises until a contract can be arranged with them or another supplier.
The prices are very high but are never meant to be paid for long. Just be aware the deemed unit prices can easily be 200%+ more than in-contract rates, so there’s a big incentive to switch quickly.
Out-of-contract rates: The amount charged is usually very similar to deemed rates but usually arises when a contract ends and a new contract has not been put in place. The problem with out-of-contract rates is that you may not realise you’re on them unless you’re checking your bill regularly.
Once again if you find yourself paying out-of-contract rates, you should either contact your supplier to be placed under contract or better yet compare prices to get a much better deal.
You can sometimes save up to 70% off the rates you’re paying.
Should I Get A Cheaper Unit Rate Or No Standing Charge?
The price of business gas is made up of two things. The unit price and standing charge. It’s important to understand the difference when you compare business gas suppliers.
Unit Price: This is how much you pay for the gas you use. It is charged in terms of pence per kWh. It is a variable charge, so the more you use, the more you pay. To get an idea of how much you should be paying, please see the tables at the top of this article.
Standing Charge: The standing charge is a fixed cost. Normally it’s charged as a fixed price per day (although sometimes per month or quarter). The difference with the unit price is that you pay the same amount regardless of how much or little gas you use.
And unlike unit prices, standing charges vary widely from supplier to supplier sometimes as low as 30p per day all the way up to £85+ per day.
Generally speaking, most price comparisons should focus on the unit price rather than the standing charge as this will determine the bulk of what you’ll pay. However, if you do see an abnormally low unit rate it’s worth your while to double-check the standing charge.
What Is An MPRN Number?
An MPRN number is unique to your gas meter. This helps locate and differentiate your gas meter from others. MPRN is short for Meter Point Reference Number.
How Much VAT Will I Pay On My Business Gas?
20% VAT is charged on top of your business gas rates. If you operate a charity or a not-for-profit, you could be eligible for a VAT reduction. You can speak to your expert business gas team for advice if you think you are eligible for a VAT reduction.