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.
Gas tariffs are divided into two types of charges: supply and usage.
Gas tariffs are comprised of tariff blocks, where you're charged a different rate for different sections of usage.
Gas companies use meter readings to get information on how much gas each household uses. If they are unable to get a reading, they may rely on estimated readings to generate a 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.
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.COMPARE & SAVE
This guide is opinion only and should not be taken as financial advice. Check with a financial professional before making any decisions.
^Energy and Water Ombudsman, Ways to save on your bills, accessed 31st March 2022.