Compare Business Gas Prices Now
Comparing gas prices and switching to a cheaper tariff or supplier is one of the quickest and simplest ways to save money on your business gas bills. We conduct a comprehensive analysis of the market and can provide you with free quotes from the UK’s most trusted energy suppliers, helping you to find a gas solution tailored to your specific business needs. Comparing business gas quotes with Smarter Business only takes a few minutes and can save your business up to 40% per year.
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How are business gas prices calculated?
What are business gas prices per kWh currently?
The amount you’re charged per kWh of gas will depend on the supplier you’re with and which business gas tariff you’re on. However, to be sure that you’re not being overcharged, it’s important to be aware of what the average cost of business gas is. It’s also worth noting that businesses will play slightly different rates depending on the size of the company, which is determined by how much gas it uses per year.
Here are the average business gas prices per kWh as of March 2024:
Business Size
Average Unit Cost of Gas
Average Gas Standing Charge
Micro Businesses (up to 5,000kWh per year)
9.6p
43.6p
Small Businesses (5,000 – 15,000 kWh per year)
7.9p
52.3p
Medium Businesses (15,000 – 25,000 kWh per year)
7.7p
73.3p
Large Businesses (25,000 – 50,000 kWh per year)
7.7p
105.2p
Very Large Businesses (50,000+ kWh per year)
6.6p
183.2p
The two main charges you’ll see on your business gas bill are the unit cost and standing charge. The unit cost refers to the rate you pay per unit (kWh) of gas used, while the standing charge is a set rate that you’re charged each day no matter how much or how little gas your business uses.
But how are these rates calculated? A number of factors go towards gas pricing, including wholesale costs, distribution costs, operating costs, and environmental taxes, such as the Climate Change Levy (CCL). Businesses are also charged 20% VAT on gas bills, although a reduced rate of 5% applies to businesses that use less that 145 kWh of gas per day.
Wholesale gas costs – the price that suppliers pay for the energy from its source – are particularly volatile, which is why many businesses opt for fixed tariffs, where they pay a set unit rate for the duration of their contract.
When looking for the cheapest business gas deal, look at both the unit cost and standing charge when comparing tariffs*. Larger businesses that use a lot of gas may be better off with a tariff with low unit costs, while smaller businesses may prefer tariffs with low standing charges. However, many suppliers that offer low unit rates demand higher standing charges and vice versa. At the end of the day, the amount of gas your business uses will determine its monthly bills.
The exact amount your business pays for gas each year will, of course, depend on how much it uses. Based on the average gas usage for each business size, this is how much you should expect to be paying annually as of March 2024:
- Micro Businesses: £400
- Small Businesses: £985
- Medium Businesses: £1,770
- Large Businesses: £3,171
- Very Large Businesses: £5,650
You should also note that business electricity rates can fluctuate quite a lot from month to month, as they are largely determined by highly volatile wholesale energy costs. While business electricity prices are currently falling and are significantly lower in 2024 than they were in 2023, there is no guarantee that this downward trend will continue. For peace of mind, it’s advisable to get a fixed energy contract, which will lock in your unit rate and standing charge for the entirety of your contract
Should you switch business gas supplier?
In most cases, the quickest and easiest way to reduce your business gas bills is to switch suppliers. This is especially true if your business is on a rollover contract or a deemed tariff, which may be the case if you haven’t switched or renewed in a few years or if you’ve recently moved into a new business premises without negotiating a new gas contract.
Unfortunately, you’re not free to switch business gas suppliers at any time, as terminating your contract before its end date will result in early exit fees, which can often be quite costly and, therefore, not worth it. But if your current contract is coming up for renewal or it’s already lapsed, then you can almost certainly save by switching. Automatic renewals often charge higher rates for gas than usual, so switching is recommended.
Switching to a fixed tariff when gas prices are low can also protect your business against any rises in wholesale costs for the duration of your contract. Wholesale gas prices are notoriously volatile, and market shocks causing sudden price hikes can be hard to predict and damaging to your business if not protected with a fixed contract.
How to switch business gas supplier
Comparing gas tariffs and switching suppliers is easy, takes just a few minutes, and is completely free. With SmarterBusiness, you can compare quotes from all of the UK’s most trusted energy suppliers so you can find a gas tariff tailored to your business. To switch your business gas supplier today, simply follow these steps:
Types of business gas tariff
Fixed Tariffs
With a fixed gas tariff, you pay the same amount for each unit (kWh) of gas used for the entire duration of your contract, regardless of any changes in wholesale costs. This will protect your business from any sudden shocks in the market, but at the same time, you wouldn’t benefit from any significant drop in gas prices. In a volatile market, fixed gas tariffs can give you peace of mind that you’ll pay the same amount for your gas each month, and your bills will only fluctuate based on your usage.
Rolling tariffs
Rolling contracts, also known as rollover tariffs, occur when your fixed or variable gas tariff lapses and you fail to negotiate a new tariff or supplier. Energy suppliers typically charge higher-than-usual rates on rolling gas tariffs, so it’s important to be aware of your business gas tariff’s end date and switch when it comes to renewal to avoid being overcharged.
Variable tariffs
On the other hand, variable gas tariffs (also known as flexible tariffs) charge different unit costs each month depending on wholesale prices and other external factors. This means that any price rises in the gas market will be passed on to your business, but you’ll also see instant benefit from any price drops. Variable tariffs are inherently more risky than fixed tariffs, but if you believe that gas prices are artificially high or you’re confident they’ll fall over the course of your contract, a variable gas tariff could be a wise gamble.
Deemed tariffs
Similar to rolling contracts, deemed tariffs occur when your business moves to a new premises but fails to negotiate a new gas contract. Whoever supplied gas to the previous tenant of the premises will place you on a deemed contract, which invariably charge higher rates than usual. This means it’s extremely important to compare business gas tariffs and find a tailored gas deal when moving to a new business address.
Other ways to save money on your business gas bill
While comparing quotes and switching suppliers is the quickest and easiest way to save on your business gas bills, there are many things you can do to ensure your gas consumption, and thus your bills, are kept to a minimum. These include:
Energy saving practices
Adopting sustainable practices at your workplace can help to reduce your gas usage and bills. It’s worth educating your employees on energy-saving techniques to use when at work, such as only heating rooms that are in use and making use of natural heat and sunlight.
Energy audits
Performing regular energy audits can help you to identify inefficiencies within your business so that you can know what actions to take. An energy auditor, such as those at SmarterBusiness, will review your business’s gas contract and analyse its gas consumption, then provide expert advice on how to save energy within your business and how to maximise the benefits of your business gas contract.
Energy-efficient appliances
An energy audit can help to identify appliances within your business that take up the majority of its gas consumption. In many cases, there will be more efficient alternatives to what you’re using, whether that’s heating systems in an office, boilers in a hotel, or ovens in a restaurant. While investing in energy-efficient appliances will come with an initial cost, you can make this money back in reduced business gas bills.
FREQUENTLY ASKED QUESTIONS
Yes. While it might be harder to find 100% green gas suppliers than 100% green electricity suppliers, they do exist. More commonly, you can switch to a supplier that uses a carbon offsetting scheme, which involves matching your business gas consumption with renewable energy investment. Switching to a green gas supplier can help you reduce your carbon footprint and meet net-zero targets, as well as showing your commitment to sustainability, which can result in a loyal customer base for your business.
Typically, business gas rates are cheaper than domestic gas prices, but the exact rates you pay will depend on the size of your business and its annual consumption. Generally, the larger your business, the less you’ll pay per kWh of gas. However, you should remember that most businesses are charged a 20% VAT rate on their gas, and the fact that businesses will most likely use more gas than households means that business gas bills are typically higher than domestic bills.
This depends on the nature of your business and the types of business gas contract you’re offered. If you’re quoted a fixed tariff with low unit costs, it could be beneficial to lock this in as it will protect you from any future price rises over the course of your contract. However, it could also be beneficial to go for a variable contract if you think prices may drop or you’re confident that you can adjust your business practices and gas usage accordingly.
Business energy suppliers often change their rates depending on the wholesale market and other external factors, such as their operating costs and profits. This means there’s no definitive answer to who is the cheapest business gas supplier, as the market is constantly changing, while the best tariff for your business will also depend on its specific requirements. The easiest way to find out who the cheapest gas supplier is right now is to run a business gas comparison*.
In most cases, you won’t need to install a new gas meter when switching suppliers, as your existing meter will be compatible with whichever supplier you choose for your business. However, it’s often advisable to install a new meter anyway when switching suppliers, as you can receive more accurate bills with a smart meter or half-hourly meter.
An energy consultant, like an energy broker, can help you identify inefficiencies in your business and advise you on ways to reduce consumption and improve its overall efficiency. Almost any business would benefit from the services of an energy consultant, especially energy-intensive businesses like restaurants, hotels, and manufacturing firms.
* All prices are reviewed against fluctuating market values and subjective variables and may not always reflect the best possible price.