A Guide to your gas bill

Have you ever looked at your gas bill and thought, "This may as well be in Greek?" You're not alone.

Understanding your gas charges and usage can be confusing. And how can you lower your gas bill if you aren't even sure how you're being charged?

This quick guide will cover the basics of how gas charges work, and how your usage affects the total bill.

What are gas tariffs?

Put simply, your gas tariff is the amount you pay for gas supply and consumption. Energy companies offer different tariffs depending on where you live.

Tariffs have two main components: the supply charge and the usage charge.

What is a supply charge?

A supply charge is a fixed, unavoidable fee that covers the cost of supplying gas to your property. No matter how much or how little gas you use, this fee will not be affected.

The supply charge usually appears on your bill in cents per day or as a total amount for the billing period (for example, a single fee covering 90 days).

What is a usage charge?

The usage charge (also called a variable or consumption charge) is the part of the bill you can impact. It is directly connected to how much gas you use during the billing period.

The usage charge usually appears on your bill in cents per megajoule (c/MJ), which is the standard unit of measurement for gas use.

What are tariff blocks?

Take a look at your gas bill. The gas charges section might look a little bit like this:

You may notice that you're being charged different rates for your usage. This is because you're being charged in tariff blocks, which is common for gas offers.

With a tariff block, there's one rate for the first section of usage (considered to be your peak usage), a second rate for the next section of usage, and so on. Blocks may be divided by daily, monthly, or quarterly usage.

You may also be charged seasonal rates, which vary depending on the time of year. Winter rates tend to be more expensive than summer.

Are there additional fees?

It's not unusual to see fees on your bill besides the standard charges. These are a few additional fees that may appear:

• A payment processing fee (usually when paying by credit card)

• An exit fee

• An establishment fee for new customers

• Late payment fee

Fortunately, it's possible to avoid the credit card fee by setting up a direct debit, and the late payment fee by paying on time. Many companies even offer discounts for paying early and by direct debit.

Meter readings

Your gas provider has to read your meter in order to get accurate information on how much gas you are using. Your bill should provide the following details:

• When your meter was actually read

• When your next meter reading is scheduled

What is an estimated reading?

Occasionally, the meter reader will be unable to access the meter during the billing cycle. In this case, an estimated reading will appear on your bill. As it sounds, this may not be a complete or accurate reading, but it is an estimate based on previous usage patterns at your property.

If the estimation is incorrect (which it likely will be), it will be fixed up (see below). It should be clearly stated as an estimate on the bill. Adjustments will be made on the next actual meter reading.

• If the estimate was too high, you'll receive a credit on your bill.

• If the estimate was too low, you'll see additional charges.

How do you monitor costs over time?

Your gas bill should show you the current charges, as well as the charges at the property for the same period in the previous year. It's a good way to keep track of your usage patterns to get an understanding of your household's gas consumption.

How do you reduce your gas bill?

If your gas bill is too high, you usually have two options:

• Use less gas. Be aware of the way you use energy and take steps to reduce your consumption. This is sometimes easier said than done, but it is possible!

• Shop around for a better offer. Available offers will depend on your location. If there are other gas companies in your area, it's worth comparing quotes to see if you can get a better price.

Not sure where to start? Compare energy offers with Compare Club to see how much you could save.

Sources

^Energy and Water Ombudsman, Ways to save on your bills, accessed 31st March 2022.

Paul Coughran is the General Manager of Emerging Verticals at Compare Club. Paul has over 20 years of experience across a wide range of industries including Banking and Finance, Telecommunications and Energy. Paul leads a team of trusted experts dedicated to helping individuals make informed decisions about their insurance and utilities needs.

Meet our energy expert, Paul Coughran

Paul's top energy tips

• 1

  Australia’s top three energy companies still hold 64% of the total Australian market, even though competition was deregulated in 2017.

• 2

  If you don't shop around for energy providers, you’re probably leaving your savings on the table by failing to compare better value options.

• 3

  Most energy providers offer discounted rates for new customers, which is a strong incentive to switch.

• 4

  There should be no interruption when you switch energy providers. You'll need to pay a new company for your energy, but there won't be a disruption to your power supply.