You should look at the first two prices when you’re searching for a new gas supplier. These are the unit cost and the standing charge. The unit cost is how much the supplier will charge you per unit of energy (kWh). The standing charge is the set price that you will pay for maintenance and transportation. The next important area to focus on is the type of gas contract on offer. There are five contract variations when it comes to gas supply:
This is when the per-unit cost of the gas that you use remains the same throughout the time of the contract. It will mean that your gas bill will go up and down depending on the volume of gas that you use, but the cost per unit will remain the same.
Some suppliers will offer you a variable rate contract, which means that the cost per unit of gas can fluctuate. Usually, the value of that unit of gas will go up or down due to market activity (such as when demand is high).
This is also referred to as an ‘out of contract’ rate tariff, and it is only applied to those businesses that have either failed to agree to a new contract or who have moved into new business premises without already having a gas contract in place. This can be a very expensive contract and not one that most business owners will want to use.
This is now a relatively rare type of gas contract to see in use because it only applies to those businesses that have not switched to a new supplier since gas deregulation. 28-Day contracts have their value in that they require only one-month cancellation notice. However, not only do 28-Day contracts use variable rates, but they also tend to be much more high-cost than the alternatives. If you’re still on a 28-Day gas contract, then switching to a new supplier is highly recommended.
You may find that you have a rollover contract if you have missed the opportunity to switch to a new gas supplier. Your existing supplier will assume that you wish to remain on the existing contract and simply roll it over.
Your next step should be to grab a copy of your latest gas bill. This will contain all of the information you need to change to a new supplier for a better deal. Armed with that information, you will then need to use a gas supply broker. These are intermediaries who will work with both you and the gas suppliers. Brokers can work in different ways, with some charging you a commission and others preferring to take a percentage share of any savings that you make. Once you sign with a broker, they will then contact gas suppliers to get quotes on behalf of your business. If your broker is working on commission, it’s not uncommon to find that what they’re going to be paid is paid for by the gas supplier. That leads to a lot of business owners under the impression that brokers are a free service. That’s why it’s so important to know exactly how your broker is going to be paid.
From competitive pricing to more suitable business benefits, there are lots of reasons why it’s always worth taking the time to take a closer look at your business gas bill. The gas supply industry is packed, so there are more options available than you might think. How much money you can save will vary depending on various factors (including your gas use and the size of your business). However, the fact is that if it’s been a few years since you last renegotiated your gas tariffs, then you’re very likely paying more for your gas than you ought to be.