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What is a regulated gas tariff and how does it affect me?

Across the UK, the US and Canada, various entities are in place to ensure that the price of gas remains affordable for households up and down the nation. So, who’s behind regulated gas tariffs? How do they affect how you choose your gas supplier and use your gas supply at home?

How does a regulated gas tariff work?

Regulated gas tariffs in the UK

In the UK, Ofgem is the official independent body for regulating gas and electricity prices. Ofgem ensures gas suppliers comply with strict environmental goals, provide adequate customer service and offer competitive prices for their gas supply.

Ofgem takes action on price controls and defends consumer interests to keep the price of gas affordable. Then, gas pricing largely falls to energy supply companies themselves.

Default and standard tariffs are the terms used to refer to the basic tariff from your gas supplier (or other energy supplier).

Often, you’ll find that default tariffs are more expensive than fixed-term tariffs, so it’s in your interest as a consumer and bill payer to agree to a fixed-term tariff with your gas supplier. You’ll often be transferred back to a default tariff if you haven’t renewed your fixed-term tariff as needed, or switched your gas supplier before your current fixed-term tariff expires.

If you want to change your tariff setup or switch gas suppliers, you’ll first need to know who’s currently supplying your gas. In the UK, you can find out who supplies your gas by checking the supplier details on a recent bill for your home.

You can also find details of the tariff you’re currently being charged for the gas you use on these bills. Plus, your gas supplier likely has a platform where you can check your gas usage data (perhaps hourly, monthly or annually) online via your customer account.

This is especially likely if you have a smart gas meter installed in your home, which automatically takes readings of your gas usage.

If you can’t find your latest bills, or you’ve recently moved home so you haven’t yet received a bill, you can still find out who supplies your gas by using the Meter Point Administration’s Find My Supplier online search tool.

Regulated gas tariffs in Canada

In Canada, the federal government doesn’t regulate gas tariffs. This falls to the Canadian provinces and territories, who have the authority to impose their own regulations on the local price of gas.

The Government of Canada only steps in to regulate the price of gas in the case of national emergencies. In total, five Canadian provinces regulate gas prices: Newfoundland and Labrador, Prince Edward Island, Nova Scotia, New Brunswick and Quebec.

Regulated gas tariffs in the US

In the US, the cost of gas is determined by its market value, so is largely governed by the balance of supply and demand.

According to the US Energy Information Administration (EIA), around ⅔ of the price of gas is directly determined by the cost of crude oil at any given time.

The remaining ⅓ of the price of gas consists of the costs associated with taxation on gas, the process of oil refining, the distribution of the gas throughout the national network and marketing prices linked to the gas industry.

Should gas prices be regulated?

Gas is very much a part of our daily lives as domestic consumers - it’s a fuel we rely on for everything from heating to hot water to cooking at home. As such, it’s key to ensure that gas prices remain affordable and that our gas supply comes from reliable entities.

Gas tariff regulation is key to this process, whether there are standard tariffs that are centrally enforced, or there’s simply a body that enforces price competition in general.

Regulating gas prices can also be a useful tool to encourage domestic gas consumers and gas consumers on a larger scale (the transport, industrial and farming sectors, for example) to move towards alternative sources of energy to power their activities.

This is increasingly vital as we tackle the effects of climate change.

Different decisions for different areas

In the case of Canada, the Government of Canada opted not to introduce centrally regulated gas prices, citing evidence that, while regulation of gas prices does help to keep them more stable, it does not actually lead to lower prices for gas consumers (that’s you at home).

As such, it’s up to the provinces and territories themselves whether they wish to regulate their gas prices.

According to the Government of Canada, consumers of gas in areas with added tariff regulation benefit from more stable gas prices, but do not pay less for their gas in comparison to the average Canadian gas consumer.

Who is affected by regulated gas prices?

As we’ve seen, various parties are affected by and/or contribute to regulation (or non-regulation) of gas prices.

  • Governmental energy regulation departments
  • Independent regulatory bodies
  • Gas supply companies
  • Gas consumers (domestic and business consumers)

Choosing the right gas tariff for your home

While regulation can be helpful to ensure that the price of gas remains affordable for the average consumer, it is not a guaranteed method for lowering the price of gas.

However, it is vital to maintain regulation in the gas market - and the energy supply market in general - to ensure that gas companies are incentivised to provide competitive gas prices, to ensure high quality customer service and to adhere to the relevant environmental targets.

For those reasons, regulatory bodies that weigh in on regulated gas tariffs are a vital asset from the gas consumer standpoint.

The best way to ensure that you’re getting your value for money in terms of your gas bill is looking into which tariff, from which supplier, will benefit your home the most. This will be based on your utilities budget and the specific gas consumption requirements of your home. As the consumer, you can shop around to find the right choice for your home gas supply!


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