This map follows gas from where it enters Britain to where it is used, and shows the main costs picked up along the way that end up on a gas bill for a home or small business in Great Britain.
Two prices on every bill
Most household and small business gas bills have two parts: a unit rate, charged for each kilowatt-hour (kWh) used, and a standing charge, a fixed daily amount paid however much you use. Every cost on this map is recovered through one or both, with VAT added on top. For households on a standard variable tariff, Ofgem's price cap sets the maximum unit rate and standing charge. Fixed-price deals and business contracts are not covered by the cap.
1. Extraction and import
Britain's gas comes partly from its own North Sea fields (the UK Continental Shelf), where production has been falling since the early 2000s, and increasingly from imports: mainly Norwegian gas by pipeline and liquefied natural gas (LNG) by ship. Britain has been a net importer of gas since 2004. Gas is traded on the wholesale market, and the cost of the gas itself is the largest single part of a household gas bill. On top of the gas itself comes a small policy levy, the Green Gas Levy, which pays producers to inject biomethane, a renewable gas made from food and farm waste, into the gas grid.
2. Transmission and the system operator
Gas then travels at high pressure along the National Transmission System (NTS), a network of large pipelines linking the North Sea landing points and import terminals to the regional gas networks and to a handful of very large users. National Gas Transmission (NGT) owns the NTS and is also the gas system operator: it keeps the gas going in and coming out in balance over each day, buying or selling gas itself when they do not match. Unlike electricity, where NESO runs the system separately from the companies that own the grid, gas balancing stays with the pipeline owner. NGT is regulated by Ofgem under the RIIO-GT3 price control, which sets how much revenue it can earn between April 2026 and March 2031. Using the NTS brings two kinds of charge. The main one is for capacity, the right to put gas into or take gas out of the system. The other is a smaller charge on the amount of gas that actually flows. For gas heading to homes and businesses, the regional network company books the exit capacity and recovers its cost through its own charges, while the flow-based charge is paid by shippers directly to NGT.
3. Distribution
Where gas leaves the NTS, at points called offtakes, its pressure is reduced and it enters one of Britain's 13 Local Distribution Zones (LDZs). These are run as 8 regional networks owned by 4 companies (Cadent, Northern Gas Networks, SGN and Wales & West Utilities), which carry gas the last miles to homes and businesses, lowering the pressure further along the way. The network companies charge for this through four main charges (System Capacity, System Commodity, Customer Capacity and Customer Fixed), alongside passing on the cost of NTS exit capacity. The cost of gas lost from the networks is built into these charges rather than billed as a separate item. A further amount of gas, called unidentified gas, cannot be traced to any customer's meter. Its cost is shared out among shippers and ends up in the price of gas.
4. The supplier
Almost every cost above is collected by the retail supplier and passed on to the customer. The supplier also has costs of its own: managing the risk of buying gas months in advance (hedging), paying for any mismatch between the gas bought and the gas customers actually used (imbalance), running the business (billing, customer service and metering), covering bills that customers never pay (bad debt), and a profit margin. One social scheme is also funded through suppliers: the Warm Home Discount, a winter bill credit for eligible low-income households, paid for through both gas and electricity bills.
5. Consumption
Finally the gas reaches the people who use it: homes, small and medium-sized businesses (SMEs), industry and gas-fired power stations. Taxes are added last: VAT on every bill, at 5% for households and usually 20% for businesses, and the Climate Change Levy on business bills only. The temporary 0% VAT rate on household electricity from October 2026 does not apply to gas. Not every bubble applies to every customer, and the mix differs between a home, an SME and an industrial site. Power stations buy their gas differently, usually taking it straight from the NTS, and their gas costs end up in electricity prices rather than on anyone's gas bill.
How big are these costs? Under Ofgem's price cap for 1 October to 31 December 2026, a typical household using 9,500 kWh of gas a year pays 7.97p per kWh plus a standing charge of 29.68p per day: around £865 a year including VAT. Before VAT, just over half of that (about £433) is the gas itself, including the cost of buying it ahead, balancing and unidentified gas. Using the pipe networks is just under a quarter (about £189), and almost all of that is the local distribution network rather than the national one. Running the supplier, including billing, customer service, smart meters and industry systems, is about a seventh (about £116). Unpaid bills, policy schemes such as the Warm Home Discount, and the supplier's profit margin are each around 3%. A small allowance for uncertainty makes up about 1%. VAT at 5% is then added on top, plus a few pounds that even out costs between payment methods. These figures change every three months as Ofgem updates the cap.
Above all of this sit the rule-makers. The Department for Energy Security and Net Zero (DESNZ) decides energy policy and proposes the laws that Parliament passes. Ofgem, the independent regulator, applies the rules: it licenses energy companies, sets how much the network companies can earn, and sets the household price cap. Neither appears as a line on the bill, but between them they shape almost every cost on this map.