Last updated: 16 October 2026
Business gas prices per kWh are higher this autumn than they were in the spring, and there is no single rate that every firm pays. Your unit rate and standing charge depend on wholesale gas costs on the day you fix, transportation charges for your site, levies and taxes, how much gas you use and the type of contract you choose.
If you are comparing quotes now, our business gas page explains how we compare suppliers and handle the switch for you.
How much are UK businesses paying per kWh for gas right now?
Gas prices for business vary widely, so a published average is only a rough guide. A café and a factory will be quoted very different rates in the same week.
The clearest measure of the market is the wholesale price suppliers pay before anything else is added. Northern Gas and Power (NGP) reported that Winter 26 gas fell 8.5% to 6.22p/kWh in the week to 25 September 2026. A week earlier, NGP said Winter 26 gas had cleared 200p/therm, the highest level that contract had ever traded.
That is the gas alone. Transportation charges, levies, the Climate Change Levy, supplier costs and VAT all sit on top, so retail unit rates are higher than these figures.
Wholesale gas snapshot from NGP
| Gas contract | Wholesale price | Date reported | Source |
|---|---|---|---|
| Day ahead gas | 6.11p/kWh, up 10.4% on the week | Week to 10 September 2026 | NGP |
| Winter 26 gas (October 2026 to March 2027) | Above 200p/therm, a record for this contract | Week to 17 September 2026 | NGP |
| Winter 26 gas | 6.22p/kWh, down 8.5% on the week | Week to 25 September 2026 | NGP |
| Q1 2027 gas (January to March) | 6.38p/kWh | Week to 2 October 2026 | NGP |
| Summer 27 gas (April to September 2027) | 4.68p/kWh, up 4.35% on the week | Week to 2 October 2026 | NGP |
| Winter 28 gas | 3.19p/kWh, half the Q1 2027 price | Week to 2 October 2026 | NGP |
For context, NGP said wholesale gas was around £37.56/MWh in April and above £61/MWh by early September. One MWh is 1,000 kWh, so that is a move from about 3.8p to over 6.1p per kWh.
How do therms convert to kWh?
Wholesale gas is often quoted in pence per therm, while your bill uses pence per kWh. HMRC’s VAT guidance treats 150 therms as 4,397 kWh, which works out at roughly 29.3 kWh per therm.
To convert a p/therm price to p/kWh, divide it by about 29.3. On that basis, 200p/therm is roughly 6.8p/kWh.
Why are commercial gas prices higher this autumn?
Supply worries ahead of winter are the main reason, according to NGP’s weekly updates:
- Low storage: European gas storage was 70.6% full on 25 September, around 15 percentage points below the five year average, and NGP warned a cold winter could run it below 10% by the end of the season.
- Still below normal in October: NGP put EU storage at 72.15% full in the week to 2 October, with north west Europe below each of the previous five years for the time of year.
- Middle East risk: NGP said that until a deal on the Strait of Hormuz is agreed, the pressures that have kept prices high remain.
- LNG supply: QatarEnergy extended its force majeure notices, adding doubt over winter cargoes.
SEFE Energy says wholesale gas and power prices have continued to rise over recent months. Its market observations show October renewal costs up around 30% to 45% compared with a few weeks earlier, and it cites Cornwall Insight research finding energy bills have climbed 25% since February 2026.
Gas also drives electricity costs, which we cover in our guide to business electricity prices per kWh.
What makes up a business gas bill?
A gas bill bundles the wholesale cost of the gas with transportation, levies, taxes and supplier costs. SEFE Energy explains that bills include the wholesale cost plus transportation charges, regulatory levies and other third party costs.
Some of these sit in the unit rate, some in the standing charge, and some appear as separate lines.
Components of a business gas price
| Component | What it covers | Source |
|---|---|---|
| Wholesale gas | The gas itself, bought by your supplier on the wholesale market | NGP |
| Transmission | Carrying gas through the national high pressure network, owned and run by National Grid Gas | Ofgem |
| Distribution | Carrying gas through local pipes to your premises; there are eight gas distribution network operators, owned by four groups | Ofgem |
| Regulatory levies and third party costs | Other non-commodity charges suppliers pass on | SEFE |
| Climate Change Levy (CCL) | Environmental tax on business gas; the main rate is £0.00801 per kWh (0.801p) from 1 April 2026, rising to £0.00827 from 1 April 2027 | gov.uk |
| VAT | Standard rate of 20% for most business use; reduced rate of 5% for qualifying use, including supplies under the de minimis limit | gov.uk, HMRC Notice 701/19 |
| Supplier costs and margin | Billing, service, risk management and profit | SEFE |
| Broker commission | The fee paid to a third party intermediary, which must be shown in the contract’s principal terms | Ofgem |
Ofgem describes network costs as the cost to build, maintain and operate the gas pipes run by network companies. Because you cannot choose your network company, Ofgem limits these costs through price controls.
Businesses with a Climate Change Agreement pay much less CCL. Gov.uk lists an 89% discount on the main gas rate from 1 April 2024 onwards for eligible holders.
What is the difference between the unit rate and the standing charge?
The unit rate is what you pay for each kWh of gas you use. The standing charge is a fixed daily amount you pay whatever you use.
Ofgem defines a standing charge as a fixed amount you pay your supplier for maintenance and other costs, such as keeping your connection to the network. That is why a site that uses little or no gas in summer still pays something each day.
A quote with a low unit rate and a high standing charge can cost a low usage site more than one with the reverse, so always work out the annual total for your own consumption.
How does your meter size and annual usage affect the price?
Your annual usage shapes both the transportation charges you pay and the prices suppliers offer. In the gas industry this is measured as your Annual Quantity, or AQ.
Xoserve, which manages supply point data for the GB gas industry, defines AQ as an estimate of the gas a site will use in a year under seasonal normal weather. For non-daily metered sites, AQ is used to set a peak day figure that determines transportation charge rates and the capacity the site needs, and an inaccurate AQ can lead to wrong transportation charges.
A few points follow from this:
- Keep meter readings accurate: Xoserve says AQ is updated from actual readings, so regular reads help keep your AQ, and your charges, in line with real use.
- Business size matters: Ofgem counts a business as a microbusiness if, among other tests, it uses no more than 293,000 kWh of gas a year.
Because usage, meter type and location all differ, average business gas rates published online rarely match the rate any one business is quoted.
What is the difference between fixed and pass-through gas contracts?
On a fully fixed contract, both the gas price and the non-commodity charges are set for the term. On a pass-through contract, the wholesale price may be fixed while some charges are billed at the actual rate, so they can change during the contract. SmartestEnergy describes the same choice for its fixed contracts: you can fix the non-commodity costs or set them to pass-through, where you pay the actual costs.
SEFE warns that not all “fixed” contracts are the same and that some pass-through deals are marketed as fully fixed. Its checklist is a useful test for any gas quote:
- Are all non-commodity charges included in the price?
- Is there a pass-through clause anywhere in the terms?
- Are both the unit rate and the standing charge fixed?
- Is the contract clearly described for what it is?
Even on a fully fixed deal, SEFE notes that government levies and taxes can still change. CCL and VAT are set by government, not your supplier.
Does contract length change the price per kWh?
Yes, and by a large margin this autumn. Using wholesale prices at the end of September for contracts starting in November 2026, NGP estimated that a 24 month contract would be around 16% lower on gas than a 12 month deal, and a 36 month fix around 27% lower.
The reason is that a 12 month contract is weighted towards this winter, the most expensive part of the curve. NGP also reported that Winter 26 gas cost 43% more than Winter 27, so longer terms spread the cost across cheaper later seasons. Your own quotes will differ.
How do you read a business gas quote?
Start with the annual cost, not the headline unit rate. Multiply the unit rate by your AQ in kWh, add the standing charge multiplied by 365, then add CCL and VAT if they are not already included.
Then check these points on every quote:
- Units: confirm the unit rate and standing charge are both in pence, and whether they include or exclude CCL and VAT.
- Usage figure: check the quote uses your correct AQ, not an estimate that is too high or too low.
- Start date and term: a contract that covers this winter will be priced differently from one that starts later.
- Fixed or pass-through: find out which charges are fixed and which can move.
- Broker fees: Ofgem requires suppliers to clearly display any broker fees in the principal terms of contracts signed from 1 October 2024.
Our business energy comparison guide shows how to line quotes up on the same basis.
How can you get a better gas rate?
Planning ahead matters more than timing the market. SEFE says waiting for prices to fall can lead to higher costs, and that out-of-contract rates are typically considerably higher than contracted prices.
Practical steps that help:
- Start your renewal early using our business energy contract renewal guide, so you never roll onto out-of-contract rates.
- Send regular meter readings so your AQ reflects real use.
- Ask for prices on more than one contract length.
- Check your VAT and CCL treatment is right for your usage.
If you think you are paying the wrong rate or the wrong VAT, a free UMW Health Check reviews your bills and supplier paperwork.
Frequently asked questions
What is the average business gas price per kWh?
There is no official single average, because rates depend on usage, meter type, location and when you fix. Wholesale gas for this winter was around 6.22p/kWh in late September according to NGP, and retail rates sit above that once transportation, levies, supplier costs and tax are added.
Why has my gas renewal quote gone up so much?
Wholesale gas rose through the summer and early autumn on low storage and supply risks. SEFE reports October renewal costs up around 30% to 45% compared with a few weeks earlier.
What is the Climate Change Levy rate on gas?
The main rate is £0.00801 per kWh from 1 April 2026, rising to £0.00827 from 1 April 2027, according to gov.uk. It does not apply to domestic consumers or to charities for non-business use.
What VAT do businesses pay on gas?
Most business use is charged at the standard rate of 20%. Supplies under the gas de minimis limit of 145 kWh a day or 4,397 kWh a month, or where 60% or more is qualifying use, get the reduced rate of 5% under HMRC Notice 701/19.
Does the temporary zero rate of VAT apply to business gas?
HMRC’s notice describes a temporary zero rate from 1 October 2026 to 31 March 2027 for qualifying supplies of electricity in Great Britain. It does not name gas, so check with your supplier or HMRC before assuming it applies to your gas bill.
What is AQ on my gas bill?
AQ, or Annual Quantity, is an industry estimate of how much gas your site uses in a year under normal weather. Xoserve explains that it feeds into your transportation charges, so an accurate AQ matters.
Is a pass-through gas contract cheaper?
It can look cheaper at the start, but you carry the risk of non-commodity costs rising, so your bill can increase during the term.
Can I see how much my broker earns?
Yes. Ofgem requires broker fees to be shown in the principal terms of business energy contracts signed from 1 October 2024.
Get a quote
Utility Market Watch compares business gas from a panel of suppliers and explains each part of the price before you sign. Request a quote, call 03333 601010 (Monday to Friday, 9am to 5pm) or contact us. Our service is paid for by the supplier through a commission included in your unit rate, and as prices change daily we cannot guarantee any quote is the cheapest.