The UK energy industry has been in turmoil as of late, with an increasing number of suppliers going bust amidst the skyrocketing prices for wholesale gas. With the winter months fast approaching, businesses that are unsatisfied with the current business gas prices in the UK and looking to cut down on overheads should start to think about switching their gas supplier for cheaper rates.
With gas prices steadily climbing higher, finding the best possible deal is more important than ever. Although the process of changing suppliers may seem daunting at first, depending on the terms of your current contract, switching to a new gas supplier may be easier than you think.
Check your existing gas contracts
The first step to changing gas suppliers is to understand the terms of your current contract. Your latest gas bill will provide you with the rate you pay for business gas as well as the standing fees that you pay over and above this on a monthly basis.
When can I switch gas suppliers?
Checking your contract will give you an indicator of when your contract is due for renewal, at which point you can switch without penalty. You will also need to see if you’re currently on a dual fuel contract. If you are, you may save by finding individual contracts for both your gas and business electricity prices.
By comparing your business gas rates in the UK today against quoted prices from potential suppliers, you’ll be able to gauge potential savings. We recommend finding existing bills during both the summer and winter seasons to account for the differences in energy consumption during these months.
It’s also advisable to check current UK gas prices for businesses to ensure that now is a good time to switch.
How do I switch gas suppliers?
Now that you’ve got a good idea of what a business of your size pays on average and know how much you’re currently paying – you can get quotes from suppliers with a clear understanding of when you’re likely to save.
First, you’ll want to check your current contract to see whether you can switch without penalties. This is usually at the end of your contract duration, but contracts will vary and allow you to arrange to switch near the end of your contract.
Now you can contract various energy suppliers yourself or ask an energy broker to do so on your behalf. The advantage of working through an energy broker is that they will be able to leverage their relationships with suppliers to find a contract that works specifically for you.
Once you’ve found the right contract for your business gas needs, you can begin the process of switching to your new supplier, locking in current business gas prices in the UK.
Your new energy supplier will inform your supplier that you intend to switch. They will take care of the finer details, and your business gas supply will remain unaffected.
You will send your address and banking details to your new supplier before your current supplier takes one last meter reading to ensure accurate final billing.
Once you have paid any outstanding fees, you will be able to switch to your new supplier – a process that is usually completed within 21 days.
Included in this period is a 14-day cooling-off period during which you can change your mind if you’d like to stay with your current business gas supplier.
There are no changes to wiring and pipes, so the only effective change is who you are paying for your business gas.
What is the right contract for me?
It is also important to investigate your options when it comes to new options, and these include tariff types.
The two main types of tariffs offered to businesses looking for gas contracts across the UK are fixed and flexible tariffs.
A fixed tariff means that you pay the same rate throughout the duration of your contract. Thus, you’ll always have a good idea of how much you can expect to pay for your gas.
Any business looking to accurately forecast their business expenses ahead of time may prefer a fixed tariff, and if your energy use is consistent – your bills will be easy to determine.
It ensures that your gas bills are predictable every month. You will also have peace of mind that you are not at risk of increased charges should there be an increase in the wholesale gas prices in the UK today. With wholesale gas prices still rising, it may be a good idea to hold off on switching suppliers for the time being if you are currently on a fixed-rate contract.
A flexible tariff, on the other hand, allows your business to take advantage of lower gas rates when the market is in your favour. However, this makes your gas bill susceptible to fluctuations in the cost of energy. It will also be more difficult to predict your monthly gas bill.
While it is true that there is a risk to this approach, businesses with flexible rate gas contracts save a lot of money during their contracts.
It is important to remember that your business will typically use significantly more gas than the average household. That’s why finding a contract that works for your unique needs could save hundreds (or even thousands) of pounds over the course of your contract.
What else impacts my quoted gas prices?
It is important to understand which factors will determine the price that you pay for business gas.
- Contract length: businesses that sign up for longer contracts will generally pay less for their business gas.
- Credit rating: if your business has a favourable credit rating, you’re more likely to receive a better quote.
- Business size and energy consumption: businesses that use more gas will pay less for their gas. This is due to the economies of scale.
- Location: any business located outside of major city centres can expect to pay more for the business gas, due to the cost of transport and other administration fees.
Who is the cheapest gas supplier in the UK?
With so many variables determining the price that you pay for your business gas, it is impossible to recommend a one size fits all solution – or a single supplier to provide your business with its energy needs.
A small business outside a city centre will pay a drastically different rate to a large organisation inside a big city – and suppliers will generally provide varying quotes based on these factors, among others.
That is why it is so important to compare quotes from suppliers that you can trust.
There are dozens of business energy suppliers across the UK, each with a number of pros and cons.
Each will be able to offer favourable rates for some types of businesses but not others. That is why it is incredibly important to compare gas quotes from a number of suppliers.
Competitive quotes for your business may factor in a number of different factors such as contract lengths or tariff options – and you may find that the right contract for your business is more expensive, but to terms that you feel more comfortable with.
We recommend regularly checking to see how much your business is paying against quotations from a number of suppliers with different tariff options and contract lengths. It will give you the knowledge that you need to make an informed decision.
Many businesses prefer to bundle their business energy and gas tariffs. In this instance, we would need a thorough understanding of your business and its needs before recommending any one supplier.
Trust the experts
The best way to save money on your business gas contract is to place your trust in an independent consultancy without a bias to any particular supplier.
At Smarter Business, we source quotes from 27 different trusted suppliers to find the right quote for you. Our team of experts will go to extra lengths to understand your specific business needs to help you take advantage of current gas prices in the UK and save you money on your gas contracts.
Additionally, we can conduct audits and identify any areas of inefficiency in your business to make big long-term savings – and formulate green energy plans to help you reach your net-zero carbon goals.
With the latest technology helping to reduce costs and emissions, we’re your go-to partner for any business energy concerns.
FREQUENTLY ASKED QUESTIONS
What is a good price for gas?
The price that you pay for your business gas will vary based on a number of factors – but a good indication is the size of your business and the amount of energy that you consume.
Here are some of the current business gas costs in the UK as of July 2021:
- Microbusinesses found themselves paying an average business gas price of 3.82 pence per kilowatt-hour (kWh).
- Small businesses are likely to pay 2.19p per kWh.
- The average gas price for medium businesses is around 2.11p per kWh.
- Large businesses can expect to pay just 1.81p per kWh on average.
- Very large companies with high consumption tend to pay an average price of 1.63p per kWh.
Taking all these into account, the average, typical business gas price is around 2.28p per kWh.
Who controls the price of gas?
UK business gas prices today are controlled by The Office of Gas and Electricity Markets (Ofgem).
Their role is to take decisions on price controls and enforcement, acting in the interests of consumers and helping the industries to achieve environmental improvements.
What is the highest gas price ever?
Gas is currently at all-time record highs, with peak front-month costs surpassing previous highs from December 2005 to reach 116.10 pence/therm in August of this year.
The uptick in demand following the COVID-19 pandemic has also played a role in increased prices. With that in mind, it is even more important for businesses to find contracts that keep costs down.
What is the average gas bill in the UK?
The average gas bill in the UK can be calculated by business size. Microbusinesses, which consume between 5,000 and 15,000 kWh of gas a year, can expect gas bills between £400 and £820, while small businesses consume between 15,000 and 30,000 kWh and can expect to pay between £820 and £1,500 a year. Medium-sized enterprises will use between 30,000 and 65,000 kWh, paying between £1,500 and £2,300 while large businesses consume roughly 75,000 kWh per year – but will pay considerably less per unit than a microbusiness.