What makes up your gas bill?
Your bill has two visible charges. Behind those rates are the costs of buying gas, moving it through the network and running the energy system.
The charges you can check
Unit rate
The price for each kilowatt hour of gas you use. Your meter records volume, which is converted to kWh.
Standing charge
A fixed daily amount that applies even when you use no gas. Multiply it by the number of days in the bill.
VAT
Domestic gas is currently charged at the reduced VAT rate of 5%. Your bill should show whether listed rates include it.
Add 5% VAT only if the rates exclude VAT. Do not add it again to VAT-inclusive prices. See the worked calculation and gas bill glossary.
Where does the money go?
Ofgem’s January 2026 market report breaks a typical capped dual-fuel bill into the categories below. It is a useful picture of the wider system, but it is not a gas-only split and it will change as cap periods and market costs move.
- Wholesale costs37%
- Network costs23%
- Policy costs15%
- Operating costs13%
- Debt-related costs3%
- Other costs9%
Source: Ofgem State of the Market, January 2026.
What those costs mean
- Wholesale
- The energy your supplier buys before selling it to you. Suppliers often buy ahead, so retail prices do not move in lockstep with today’s wholesale price.
- Networks
- The pipes, transmission system and local distribution network that move gas to your home.
- Policy and social schemes
- Programmes such as energy-efficiency obligations and support for vulnerable customers.
- Operating and debt-related costs
- Billing, customer service, metering, bad debt and other costs of supplying households.