Facts & How-To's

Factors That Affect Gas Prices

Gas prices keep on fluctuating for different reasons. This makes it difficult to predict your future energy bills. As a business, it’s important to understand things that are increasing gas prices. Know when to switch to a better option. Read more on how to make a switch and lower your business energy. Here are the top reasons why business gas prices are rising.

Climate Change

Climate change issues are quickly changing the way energy is consumed. Most governments are now encouraging businesses to reduce their non-renewable energy use. Heavy users of fossil fuel energy are being penalized. And this has hugely affected energy prices.


Gas is the major source of central heating. Most of it is consumed during cold weather. As such, wholesale gas prices tend to be higher during winter than during summer. So, be careful about your timing. You need to know exactly when to make a switch to land the best deal.

Over the past years, most industrial customers have been striving to become as energy efficient as possible. And this has significantly reduced the pressure on gas demand. If you want to save money, be mindful of your timing.  Know when to purchase an energy deal and when to make a switch.

Currency Related Movements

This is another aspect that can drive the price of gas and electricity. If the UK currency is stronger than the euro, traders will purchase cheaper energy from Europe rather than the UK. Weakening a country’s currency will automatically lead to lower energy prices.

Closures Of Power Stations

Most governments have opted to utilize gas for the production of electricity. And this has led to the widespread closure of power stations. This has also put a rising demand on the supply of gas and it’ll result in a sharp increase in gas prices.

It’s believed that as more people switch to green energy, dependence on gas will reduce, and it’ll in turn become a cheaper option.

Renewable Energy Sources

Although there’s a steady increase in the use of renewable energy sources, it’s still a long way to go. Solar systems can’t produce electricity without sunshine and turbines can’t do it without wind either.

So, what’s the solution to all these? People will still have to fall back on creating a more reliable source of gas. If gas must be used for the generation of electricity, then that’ll inevitably increase the cost of purchasing gas.

Calculating Business Gas Prices

Wholesale Costs

This costs your energy provider to purchase gas and electricity from the original producer. Although these prices are often affected by prevailing market forces, your supplier will have to carefully determine what they can charge their clients without making a loss.

Energy prices typically change with the global demand. As such, any fixed-price energy plans should be held at a price tag that can absorb extreme fluctuations in price while still generating profit.

Environmental Costs

Every business must pay a Climate Change Levy (CCL) in today’s modern world. This refers to an environmental tax imposed on energy. It applies to commercial and industrial businesses. And it’s commonly charged on power, heating, as well as, lighting.

Nonetheless, the government has formulated several measures to ensure that manufacturing industries and other energy-intensive businesses aren’t disadvantaged. Climate change is currently a going concern for everyone. And it’s therefore important that every business keeps abreast with the latest government regulations to ensure they aren’t caught off-guard.

Operating Costs

Operating costs often result from the equipment used to produce energy. They include labor costs, as well as, maintenance costs.

For downtime to be minimized, maintenance work is essential. While operating costs might be quite high during the implementation period, the supplier will always find a way to bring them down with time.


Energy producers must pay tax on their profits. Essentially, there are three common types of tax levy:

  • Petroleum Revenue Tax – This is intended to stop any exploitation of petroleum products, such as gas. It was introduced to regulate the pricing of petroleum products in various markets.
  • Ring Fence Corporation Tax – During the first year, energy suppliers usually receive 100% allowances for their capital expenditure. In that regard, no other activities will affect the profits they generate from gas extraction.
  • Supplementary Charge –a company’s ring-fenced profits are often subject to an additional charge. However, this doesn’t usually reduce their financial costs.

How To Save Energy

The high cost of energy should worry your business. Businesses should look for solutions to bring down these costs. Remember, high energy costs can eat into your company’s revenues. It will also make your business unsustainable. Here are the top ways of cutting utility bills.

Switch To Solar

Invest in solar energy. Ask your energy supplier about solar energy. Most suppliers have incorporated solar solutions. Thus, think about solar panels. Of course, the initial, installation costs can be high. However, they will save you a lot of money in the long run. Once installed, you don’t have to pay anything. Plus, you can sell the excess energy to the grid and generate more revenues.

Energy Saving Appliances

Think about investing in energy-efficient appliances. These appliances optimize energy usage. For instance, they operate under low energy settings and temperatures. According to experts, you can save up to 75 percent of energy with energy-efficient appliances.

Invest in LEDs, CFLs, refrigerators, washing machines, and fans. These smart appliances can transform your home into a modern living space while also bringing you substantial money savings.

Shop around for high-quality appliances that’ll serve you for many years to come. Remember, not all companies sell quality products. You may find some that sell counterfeit products. So be careful when hunting for energy-smart appliances. Make sure that the vendor is honest, transparent, and reputable.

The Bottom-Line

Purchasing the right business gas is important. Getting cheaper gas will save your business a lot of money. Understand all the components of business gas. Determine factors that are making the prices of business gas increase. The above are key things you should know regarding business gas. 

Also read: Top Online Shopping Sites in Canada


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