Written by 
Key fact, UK gas, Q2 2026
Ofgem price cap for gas, 1 April to 30 June 2026
5.74 p/kWh
Unit rate, direct debit average
29.09 p/day
Standing charge, direct debit average
11,500 kWh
Ofgem medium TDCV, gas, 2026
Includes 5% VAT, England/Scotland/Wales average. Source: Ofgem price cap announcement (25 February 2026) and Ofgem TDCV publication.
The belief most UK households have about their gas bill
Most British bill-payers think a gas tariff is one price per "unit" they can drive down by switching supplier. That model broke during the 2022 wholesale crisis. Today a UK gas tariff is a three-part construct: a unit rate in pence per kilowatt-hour, a daily standing charge independent of usage, and 5 percent VAT on top.
For most households still on the standard variable tariff (SVT), all three parts are capped by Ofgem and refreshed every three months. The cap sets a ceiling, not a frozen price. The headline "5.74 pence per kWh" is a maximum, not a market deal, and fixed offers below it depend entirely on where the next cap lands.
What "5.74 pence per kWh" actually means on your meter. A kilowatt-hour (kWh) is a unit of energy, not volume. Your meter, however, measures volume: cubic metres (m³) on a metric meter or cubic feet (ft³) on older imperial ones. The supplier converts in the background; the 5.74 p/kWh figure is what you pay for the heat content of the gas, not the volume itself.
A typical UK household using 11,500 kWh a year (the Ofgem medium consumption value for 2026) pays around £660 for the energy plus £106 in standing charges, for a total near £766 on the current capped rates. That includes VAT but excludes reading errors, which are the silent driver of most bill disputes.
Why generic gas-tariff advice misses the point in 2026
Comparison guides written before 2022 assume the cheapest unit rate wins. That logic broke when the cap was introduced, then made quarterly. The unit rate alone now tells you little:
- Standing charges sit close together across suppliers because Ofgem caps them, so the room to undercut on gas is small.
- The cap is reviewed every quarter, so a 12-month fixed deal is a bet that the next four caps will average higher than your locked-in rate.
- Most heating happens in Q1 and Q4, so the unit rate that matters is the one in force during winter, not the spring/summer headline.
- Suppliers rarely advertise gas separately; in practice you accept the gas terms bundled with the electricity contract you signed.
The useful question is not "who is cheapest". It is: given my real consumption, my meter type, and the next two cap reviews, am I better off on the cap or fixing now.
How a UK gas bill is really built
Two transformations happen every time a reading is submitted. The volume your meter recorded is converted into energy. Then that energy is multiplied by your unit rate, the standing charge is added, and VAT goes on top.
Volume to kWh: the conversion you never see
If your gas meter is metric (m³), the formula your supplier uses is:
kWh = volume (m³) × 1.02264 × calorific value (MJ/m³) ÷ 3.6
1.02264 is the volume correction, adjusting for the temperature and pressure of gas entering your home. The calorific value (CV) is the heat released when a cubic metre of that batch is burned; in the UK it sits between 38 and 41 MJ/m³, with around 39.5 MJ/m³ as the typical average. National Grid publishes a daily CV per distribution zone, which your supplier averages over the billing period.
Worked example. Your meter goes from 00845 to 00945: 100 m³ used. With CV at 39.5 MJ/m³:
100 × 1.02264 × 39.5 ÷ 3.6 = 1,122 kWh
That figure is what gets multiplied by the unit rate. If the CV drifts to 39.0 instead of 39.5, the same 100 m³ becomes 1,108 kWh: about 1.3 percent less energy, several pounds over a year of heavy heating.
Unit rate + standing charge + 5% VAT
Once the volume is in kWh, the rest is arithmetic:
- Energy cost = kWh used × unit rate (5.74 p at the current cap).
- Connection cost = days × standing charge (29.09 p at the current cap).
- VAT of 5 percent is already inside the capped rates (reduced from the standard 20 percent for domestic energy).
For Ofgem medium consumption (11,500 kWh over 365 days):
| Consumption band | Annual usage | Energy cost | Standing charge | Total (incl. 5% VAT) |
|---|---|---|---|---|
| Low | 7,500 kWh | £430.50 | £106.18 | £536.68 |
| Medium (Ofgem TDCV) | 11,500 kWh | £660.10 | £106.18 | £766.28 |
| High | 17,000 kWh | £975.80 | £106.18 | £1,081.98 |
Figures use the Q2 2026 cap (gas, direct debit average) applied to the listed usage. VAT is already included in the capped unit rate and standing charge, so the totals are gross.
How UK households overpay on gas
Overpayment on gas rarely comes from picking the wrong supplier. It comes from two compounding problems, both involving the meter.
Estimated bills running for years
If you do not have a smart meter and you do not submit readings, your supplier estimates from historical patterns. Estimates drift; after two or three years the gap can run to hundreds of kWh either way. When a real reading finally lands, you face a catch-up bill (or a refund that took too long).
The fix is unglamorous: submit a manual reading once a month, or accept the smart meter offer. SMETS2 meters now dominate the rollout and stay smart across suppliers.
Ignoring the seasonality of direct debit
A monthly direct debit smooths annual consumption across 12 equal payments. In reality, gas is sharply seasonal: a typical UK household burns 60 to 70 percent of its annual gas in Q1 and Q4. You build credit in summer and consume it in winter. If the direct debit was set on too-low an estimate, you arrive at March in debit and the supplier raises your monthly payment, sometimes aggressively.
Check your balance at the end of March (cold season over) and the end of September (before the next one). The summer credit should be roughly two to three months of average usage, no more.
Insider truth: gas sets the price of UK electricity too
There is a structural fact almost no comparison site explains. In the British wholesale electricity market, the price for any given half-hour is set by the marginal generator: the most expensive plant needed to meet demand. In Great Britain, that plant is usually a gas combined-cycle turbine (CCGT), even when most of the electricity in that half-hour comes from wind or nuclear.
When wholesale gas spikes, wholesale electricity spikes with it, even though gas only generates roughly a third of annual UK electricity. This is the mechanism behind the 2022 to 2024 cap escalations. The gas tariff you sign for your boiler is not isolated from your electricity tariff; both depend on the same input.
If you are considering a fixed dual-fuel tariff in 2026, you are essentially buying protection against a gas-price spike on both fuels at once. The electricity side moves whenever European gas markets move.
Free tool
Real UK gas bill estimator
Plug your annual gas usage in (kWh or m³) and see exactly how the bill is built at the Q2 2026 Ofgem cap.
Your inputs
I know my usage in:
UK average ~39.5 MJ/m³. Your bill shows the value used.
Constant 1.02264 set by Ofgem.
Your estimated annual gas bill
Energy used
Monthly average
Total annual cost (incl. 5% VAT)
Using a year, you would pay around for gas: for the energy you use and just to be connected.
Estimator uses Q2 2026 Ofgem cap defaults. Replace the unit rate and standing charge with the figures on your bill for a tariff-specific number.
What you should actually do
Two decisions matter far more than picking the "cheapest" supplier: getting your real consumption right, and choosing between the cap and a fixed deal at the right moment.
Read your meter correctly
Read only the digits before the decimal (the red dial does not count). Submit through your supplier's app or website. Three readings a year (winter, late spring, late summer) keep estimates honest if you do not have a smart meter.
If the annual usage printed on your bill is materially below the 11,500 kWh Ofgem TDCV and you heat with gas, ask the supplier to review the estimate.
Choose between fixed and the cap
A fixed gas tariff only saves money if its unit rate plus standing charge, averaged over the contract, beats the average of the caps that will apply during the same period. A 12-month fix is a bet on four cap reviews. Useful tests before signing:
- Is the fixed unit rate below today's 5.74 p/kWh, or only marginally above it.
- Does the fix cover at least one full winter.
- Are there exit fees, and how large are they per fuel.
- How does the standing charge component look (this is where some "cheap" deals quietly recover margin).
In a falling wholesale market the cap follows within three months and the SVT often beats a fix. In a rising market the reverse is true. There is no universal answer, only a calculation to redo each quarter.
Run the maths on your own bill
Use the estimator above with the unit rate and standing charge printed on your latest gas bill, then compare to a current fixed offer before deciding to switch.
Conclusion: a cheap kWh of gas is hiding a global market
UK gas tariffs look simple from a distance: one unit rate, one standing charge, 5 percent VAT. Behind that simplicity sit a metric meter, a daily calorific value, a quarterly cap, and a wholesale market that prices British electricity at the same time. The 5.74 p/kWh on your bill is the visible tip of all that.
For most households the highest-value actions are not switching suppliers, they are submitting real meter readings, keeping the direct debit aligned with seasonal use, and re-running the cap-versus-fix calculation each time Ofgem announces a new quarter. The estimator above gives you the number those decisions hinge on.
Frequently asked questions
What is the average UK gas price per kWh in 2026?
For households on a standard variable tariff paying by direct debit, the Ofgem price cap for the second quarter of 2026 sets gas at 5.74 pence per kilowatt-hour, plus a standing charge of 29.09 pence per day, including 5 percent VAT. Rates vary slightly by region.
How do I convert gas units (m³) into kilowatt-hours?
Take the cubic metres used, multiply by the volume correction factor (1.02264), multiply by the calorific value of the gas in megajoules per cubic metre (typically around 39.5), then divide by 3.6. The result is the energy in kilowatt-hours, which is what you are billed on.
Does a fixed gas-only tariff still make sense in 2026?
It can, but only if the fixed unit rate is meaningfully below the current cap and the fixed term covers a heating season. Because the cap is reviewed every three months, locking in just above the cap for 12 months can leave you worse off if wholesale prices fall.
Why is my gas direct debit higher than what I actually use?
Suppliers smooth your annual estimated consumption across 12 equal monthly payments. You build credit in summer and burn through it in winter. If your meter readings are estimated rather than real, the imbalance can persist for years.
How can gas prices affect my electricity bill?
In Great Britain, gas-fired power stations are usually the marginal source of electricity, meaning they set the wholesale price. When gas is expensive, the electricity price cap tends to rise even though most generation comes from other sources.
The services and products mentioned on this website may only represent a small selection of the options available to you. Selectra encourages you to carry out your own research and seek advice if necessary before making any decisions. We may receive commission from selected partner providers on sales of some products and/or services mentioned within this website. Our website is free to use, and the commission we receive does not affect our opinion or the information we provide.