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Two businesses on the same street can pay very different gas rates. That is not a mistake, it is how the market works. Business gas is individually priced against your usage, your meter, your region and the wholesale market on the day you fix. This page breaks down what your rate is built from, so you can judge whether yours is competitive.
The Two Parts of Every Gas Rate
Both matter. Neither tells you the whole story on its own.The Unit Rate (p/kWh)
What you pay for each unit of gas you burn. This is the number suppliers lead with, and the number most businesses compare on. It is also the one that hides the most.
The Standing Charge (p/day)
A fixed daily cost for your connection and meter, payable whether you use any gas or not. Charged 365 days a year regardless of consumption.
Why the Unit Rate Alone Is a Bad Comparison
A real quote, and what it reveals.Below is one quote we secured in July 2026 for a large user consuming around 208,000 kWh a year, from one of the suppliers on our panel, shown across three contract lengths.
| Contract length | Unit rate (p/kWh) | Standing charge (p/day) | All-in (p/kWh) |
|---|---|---|---|
| 12 months | 5.860 | 648.81 | 7.00 |
| 24 months | 5.355 | 663.62 | 6.52 |
| 36 months | 4.990 | 678.36 | 6.18 |
A single quote from one supplier on our panel, secured 14 July 2026 for a large user with an October 2026 start. Rates exclude VAT and the Climate Change Levy. This is one real quote, not a market average.
Look at what moves. As the term lengthens the unit rate falls (5.860p to 4.990p) but the standing charge rises (648.81p to 678.36p per day). A business comparing on unit rate alone sees a clear winner. A business comparing on all-in cost sees the same winner, but for the right reason, and by a different margin.
On this site’s consumption, the gap between the 12-month and 36-month deal is roughly £1,700 a year. That is the difference a proper comparison finds.
How to Work Out Your All-In Rate per kWh
The only number worth comparing.Your all-in p/kWh is your total annual cost divided by your total annual usage. The formula:
[(Annual kWh x unit rate) + (365 x standing charge)] divided by Annual kWh
A worked example, using illustrative figures. A business using 30,000 kWh, quoted 7.0 p/kWh with a 35 p/day standing charge:
> Gas cost: 30,000 × 7.0p = £2,100
> Standing charge: 365 × 35p = £127.75
> Total annual cost: £2,227.75
> All-in rate: £2,227.75 ÷ 30,000 = 7.43 p/kWh
That 7.43p, not the 7.0p headline, is what you are actually paying. The lower your consumption, the more the standing charge distorts your effective rate, which is why small sites should be especially wary of headline unit rates.
What Is Inside Your Unit Rate
Your unit rate is not just the cost of gas.> Wholesale commodity cost. The biggest component, and the market’s rather than the supplier’s. See our wholesale gas tracker for today’s price.
> Transportation and distribution. Moving gas through the network to your meter. Varies by region.
> Climate Change Levy. A government tax on business energy. See our CCL rates page.
> Shaping and risk premium. The supplier’s cost of matching your usage profile and carrying price risk.
> Supplier margin. And, where a broker is involved, the broker’s commission.
Understanding the split matters, because only some of it is negotiable. The wholesale element is the market’s. The margin and the structure are where a tender actually wins you money.
What Is a Good Business Gas Rate?
There is no universal answer, but there are honest benchmarks.> Volume drives price. Larger users consistently secure lower unit rates. A micro business will not get a large user’s rate, no matter who they use.
> Timing matters more than most realise. The same meter quoted a month apart can price very differently as the wholesale curve moves.
> Region matters. Transportation costs vary by gas network, so identical businesses in different areas see different standing charges.
> Your term shapes your price. As the example above shows, contract length changes the whole structure, not just the number.
The only meaningful test of whether your rate is good is to put it against the market. A single supplier can only ever tell you their own price. Compare business gas or get a quote.
Business Gas Rates FAQs
What is a good business gas rate per kWh?
It depends on your consumption, region, meter and contract length, so there is no single benchmark. Larger users pay less per unit. The reliable test is tendering your meter across suppliers and comparing on an all-in p/kWh basis.
Why is my business gas rate higher than someone else's?
Usage volume, region and gas network, meter type, contract length, when you fixed and your creditworthiness all move the price. Two businesses fixing on different days can see materially different rates.
Do business gas rates include VAT and CCL?
Quoted rates usually exclude both. Business gas carries the Climate Change Levy and 20% VAT as standard, unless you qualify for the reduced 5% rate.
Are longer gas contracts always cheaper?
Not always, but often, and not for the reason people assume. The unit rate typically falls with term while the standing charge rises, so you have to compare all-in. It also depends on the shape of the wholesale forward curve at the time.
How often do business gas rates change?
Wholesale prices move daily, so the rates available to you change constantly. A quote is usually only valid for a short window.
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