Business gas is the gas tariff to keep with the demands of commercial gas. This tariff is set by gas suppliers for different commercial consumers. Not all businesses need gas for their operations but those that need it should ensure they get gas at the best commercial tariff to help keep their expenses in check.
Business gas is different from domestic gas. Business gas meets the demands of industrial consumers. Here are some basics that should be cleared before signing the business gas contract.
The billing period of business gas should be negotiated before setting the contract. Small businesses and organizations prefer shorter billing periods. This helps them keep their spending in control.
The unit rate of business gas refers to the price to be paid for each kilowatt-hour of gas. If the unit rate is low if the business is not large enough and does not consume much business gas.
Every type of business gas has standing charges on the contract. This refers to the daily fixed cost. It covers the maintenance of the energy meter.
Unit cost and standing charges vary as per business size. Here is an example:
- Microbusiness has a unit cost of almost 5p per kWh and a standing charge vary from 19p – 25p per day
- Small business faces unit cost of around 4.5 – 5p per kWh with standing charge of 19p – 25p per day
- Medium business’s unit cost varies from 4.3p – 4.5p per kWh and standing charge varies from 24p – 25p per day
Difference Between Business and Household Tariffs
It is common to get business gas at lower rates when compared to domestic gas. This difference is because the consumption and demand for commercial gas are higher. On the other hand, business owners have to pay a large chunk of VAT, various other charges and levies to comply with their country’s regulations.
Contracts can be tailor-made according to the client’s needs. This means business gas contracts are based on different factors including business industry and usage. Contracts last a couple of years.
Comparing What Is Available in the Market
Switching between business gas suppliers is not as easy as it is with domestic gas suppliers. Generally, there is no predefined tariff for business gas. Every supplier has different gas rates. Usually, it depends upon the location of the business, their consumption rate and credit history.
It is inevitable to know about business needs and tariff rates available in the market. To give a better idea, here are the most common gas tariffs for small to medium sized businesses.
Fixed-Rate Tariffs have predefined unit rates and it remains constant throughout the contract period. Businesses must check before finalizing fixed-rate tariffs.
Deemed Rate Tariff
This kind of tariff has a 28-day rolling term that is affected when the client and supplier fail to agree on a new contract. If business owners find this tariff expensive, they can switch to another tariff by giving a 28 days’ notice.
A rolling contract ties the client into a year-long and new contract but at higher rates. The client has the freedom to negotiate a new contract on extended terms at a lower rate but the rates will still not be market competitive. Rolling contracts are not common.
If a business has signed up for deemed rates and a rolling contract, then it is most likely it is paying above average.
Business Energy Suppliers
When looking for the cheapest gas, there are numerous commercial energy suppliers each having varying rates and customer ratings. Some of the common business energy and gas suppliers are:
- British Gas Business
- Contract Natural Gas CNG
- Corona Energy
- DONG Energy
- EDF Energy
- Haven Power
What is Multisite Metering?
Multisite metering is when one supplier provides gas to different premises of a business. This is beneficial for simplifying billing and if a business operates across more than one site or if there’s a large business with high energy demand and there are multiple energy meters across one site. In both cases multisite meters are best for saving time and money, it will not only integrate energy rates and renewal dates into the one plan, but it can also give you greater negotiating power.
Factors Affecting the Cost of a Business Gas Plan:
Factors that influence the business gas plan are:
- Business sector – A real estate agent just needs gas for heating and hot water whereas other businesses rely on gas for their goods and meet the demands of their customers. Some businesses have higher or constant gas consumption such as restaurants. They use a lot more gas so they might want cheaper unit rates to make up for the huge amount that they consume.
- Location – Location may also influence the unit rates as some suppliers operate only in limited areas and restrict the gas tariffs.
- Size – The size of the business has a lot of influence on the tariff as it indicates how much gas is needed. The bigger the business, the cheaper the rate as compared to the smaller businesses.
- Usage – The amount of gas consumed by a business can affect a supplier’s offers. Often the greater the consumption the cheaper the rate is.
- Contract type – A fixed contract can secure unit rates whereas a flexible contract tends to cause fluctuation in prices.
- Credit score – A good credit score will acknowledge the suppliers about the billing of the contract.
- Timing – Prices can decrease or increase based on market gases. So it's necessary to negotiate the prices even on the fixed tariff.
The Bottom Line
Business gas refers to gas tariffs planned by suppliers for commercial purposes. It differs from domestic gas as it needs to keep up with the demands of commercial consumers. Business gas rates are cheaper than domestic ones as they are based on larger commercial demands and they last up to five years. There are three forms of gas meters available: Digital meters, electronic meters, and dial meters. There are different types of business gas contracts available: Fixed-term contracts charge fixed processes throughout the contract despite the price hike, variable-rate contracts—risky as they may fluctuate during each billing period, roll-over contract—a 28-days contract and deemed rate contracts.
Running a gas and oil business has certain regulations and legislations. Both client and business gas suppliers must be aware of them beforehand.