Business Gas-Only Suppliers UK: Who Specialises and Why It Matters

Most businesses assume that all energy suppliers offer both gas and electricity. For the domestic market this is largely true - the major suppliers all hold both electricity and gas supply licences and actively market to both markets. In the non-domestic sector, particularly at the industrial and commercial end of the market, a different structure exists: suppliers that hold only a gas supply licence and operate exclusively in gas procurement. Understanding why these gas-only suppliers exist, what they offer that dual-fuel suppliers do not, and how to identify them before contracting has practical relevance for any larger commercial business managing gas as a significant cost line.

The licensing basis for gas-only supply

The Gas Act 1986 provides the legal framework for gas supply licensing in Great Britain. Under the Act, any person supplying gas through pipes to premises must hold a supply licence granted by the Gas and Electricity Markets Authority (administered by Ofgem). The electricity supply licence is a separate instrument under the Electricity Act 1989, and the two licences are entirely independent. There is no requirement under either Act for a supplier to hold both, and many businesses in the supply sector have chosen to hold only one.

Ofgem maintains a register of all holders of current gas supply licences and electricity supply licences as separate lists. A supplier that holds only a gas supply licence will appear on the gas licence register but not on the electricity register. Identifying whether a prospective supplier holds both licences is a straightforward public register check that any business can perform before entering a contract.

The standard conditions of gas supply licences set out the obligations that all licensed gas suppliers must meet, regardless of whether they also hold an electricity licence. These include obligations to supply on request to premises within their distribution area on deemed terms, to comply with microbusiness protections under SLC 7A where applicable, and to cooperate with the Supplier of Last Resort process if their licence is revoked.

Why specialist gas-only suppliers exist in the non-domestic market

The existence of gas-only suppliers in the non-domestic market reflects the structural differences between gas and electricity as traded commodities and as supply operations. Several factors drive specialisation:

• Gas trading expertise. Natural gas is traded on different markets and through different instruments from electricity. The NBP (National Balancing Point) is the primary UK gas trading hub, and gas price risk is managed through separate forward contracts, financial instruments, and physical supply agreements from electricity. Suppliers that focus exclusively on gas can develop deeper risk management expertise and potentially offer more competitive pricing to large gas consumers.
• Capital and regulatory efficiency. Holding and maintaining a supply licence requires capital adequacy, metering obligations, and regulatory compliance. A business that wants to enter only the gas supply market does not need to meet the separate requirements for electricity supply licensing, reducing its capital requirements and regulatory surface area.
• Shipper capability. Gas-only suppliers must also hold or have access to shippers' licences or transportation arrangements under the Uniform Network Code. Building deep UNC shipper capability, particularly around balancing, nomination, and AQ management, is a specialisation that favours focused operators.
• I&C market focus. At the industrial and commercial end of the non-domestic gas market, where large volumes, complex load profiles, and bespoke contract structures are the norm, specialist suppliers can compete effectively without the overhead of an electricity supply operation serving smaller accounts.

How gas-only suppliers price differently from dual-fuel suppliers

Gas-only suppliers in the I&C segment typically operate on a commodity-plus-costs pricing model: the gas commodity price is linked to a market reference rate (often the NBP day-ahead or season-ahead curve), with transportation, balancing, and other pass-through costs added separately. This structure is more transparent than the all-in unit rate offered by many SME-focused dual-fuel suppliers and allows the customer to understand exactly what component of their gas price reflects wholesale market conditions versus regulated network costs.

For businesses with sophisticated energy management, this pricing transparency enables more effective budget forecasting and hedging decisions. For businesses without energy management resource, it introduces complexity that a simpler bundled rate product does not. The appropriate pricing structure depends on the business's consumption volume, its appetite for price risk, and its internal capability to manage a pass-through gas contract.

Dual-fuel suppliers that also serve the I&C gas market may offer comparable pricing structures to gas specialists at larger consumption levels, but their account management model is typically designed around a broader customer base. The relative pricing advantage of a gas specialist versus a dual-fuel I&C supplier depends on market conditions and the specific volumes involved.

How to identify gas-only suppliers on the Ofgem register

Ofgem's licensed supplier register is publicly accessible at ofgem.gov.uk. The register lists separately those holding electricity supply licences and those holding gas supply licences. A business can search both registers to determine whether a specific supplier holds a gas-only licence, an electricity-only licence, or both.

Practical steps to verify a supplier's licence status:

1. Access the Ofgem licensed supplier register at ofgem.gov.uk
2. Search for the supplier name on both the electricity and gas registers
3. If the supplier appears only on the gas register, it holds a gas-only licence
4. If the supplier does not appear on either register, it is not currently licensed to supply and the business should not contract with it
5. If the licence status is unclear from the register, contact Ofgem's consumer enquiry service for clarification before signing any contract

A business contracting with a gas-only supplier should be aware that if it wants to switch its electricity supply independently, the gas supplier cannot assist with electricity procurement. This is an administrative consideration rather than a regulatory constraint, but it is relevant for businesses that value a single point of contact for energy account management.

Contracting considerations specific to gas-only suppliers

The contractual framework for gas supply with a gas-only supplier is the same as for any other licensed gas supplier: the Gas Act 1986 licensing framework, the standard licence conditions as set by Ofgem, and the individual contract terms negotiated between supplier and customer. There are no different or reduced protections for contracts with gas-only suppliers versus dual-fuel suppliers.

Key contractual considerations when engaging a gas-only specialist:

• Shipper identity. Confirm whether the supplier is also acting as the registered shipper for the MPRN or whether a separate shipper entity is involved. This matters for AQ corrections, data amendments, and the SoLR transfer process if the supplier fails.
• Pass-through cost structure. Understand which cost components are fixed for the contract term and which are passed through at cost. Transportation charges, BSUoS equivalent costs for gas (Locational Marginal Pricing elements), and levies may all be variable.
• Exit provisions. Gas-only specialist contracts at the I&C level may include take-or-pay structures or volume commitments that create significant exit fee exposure if consumption falls below the contracted level.
• SoLR exposure. A gas-only supplier that fails will trigger a SoLR process for gas only. The business's electricity supply is unaffected. Assessing the financial resilience of a gas-only specialist, particularly a smaller independent, is a relevant due diligence step for larger consumption accounts.

Gas-only supply in the context of decarbonisation

The commercial gas supply market faces a structural headwind from the UK's net-zero commitments. The Climate Change Committee's published carbon budgets and the government's Heat and Buildings Strategy both point toward progressive displacement of natural gas in commercial heating. Gas-only suppliers operating in the non-domestic market are aware of this trajectory and some have begun offering bio-methane or green gas tariffs as a transition product. The availability and pricing of these products varies considerably and is not regulated under the same framework as REGO certificates for electricity.

Businesses with net-zero commitments that are also significant gas consumers should assess whether their gas procurement strategy needs to account for a transition away from natural gas over the medium term, and whether their supply contract structures are compatible with that transition.

Frequently Asked Questions

Editorial disclaimer: This article describes gas-only supply licensing and contracting considerations based on publicly available Ofgem and legislative sources. It does not constitute commercial procurement advice for any specific business situation.

Can a microbusiness use a gas-only specialist supplier?

Yes. A licensed gas-only supplier can supply any size of business customer, including microbusinesses. The Ofgem microbusiness protections under SLC 7A apply to any licensed gas supplier serving customers that meet the microbusiness definition, regardless of whether the supplier also holds an electricity licence. A microbusiness contracting with a gas-only supplier retains all the SLC 7A rights relating to renewal notice, broker commission disclosure, and Energy Ombudsman access.

Is a gas-only supplier subject to the same SoLR protections as a dual-fuel supplier?

Yes. The Supplier of Last Resort process under the gas supply licence standard conditions applies to all licensed gas suppliers, including those that hold only a gas licence. If a gas-only supplier ceases trading and its licence is revoked, Ofgem appoints a SoLR to take on its customer accounts in exactly the same way as for a dual-fuel supplier failure. The SoLR for the gas accounts may be a dual-fuel supplier or another gas-only licensed supplier, depending on who Ofgem appoints. The customer's electricity supply, held with a separate supplier, is unaffected.

How does a gas-only supplier handle AQ corrections compared to a dual-fuel supplier?

The AQ correction process under the Uniform Network Code is identical regardless of whether the registered shipper is a gas-only supplier or the gas arm of a dual-fuel supplier. The shipper's obligation to maintain accurate MPRN data and to submit corrections when supported by evidence applies equally. In practice, some gas-only specialists with strong UNC operations capability may have more streamlined internal processes for handling AQ amendments because gas data management is their core business rather than a secondary administrative function.

What due diligence should a business do before contracting with a gas-only specialist?

The minimum due diligence steps are: verify the supplier's current licence status on the Ofgem gas supply licence register; confirm the supplier's shipper status or the identity of the registered shipper it uses; review the contract's pass-through structure to understand exposure to variable cost changes; and assess the exit provisions and volume commitment terms. For larger consumption accounts, the supplier's financial resilience is a relevant consideration given the non-retrospective nature of SoLR rate changes.

Can a gas-only supplier also supply biomethane or green gas?

A licensed gas supplier can supply biomethane through the existing gas network infrastructure, as biomethane is injected into the gas grid and is indistinguishable at the point of delivery from natural gas. Whether a specific gas-only supplier offers biomethane-backed tariffs depends on its commercial proposition. There is no separate licensing category for biomethane supply - it falls within the standard gas supply licence. Businesses seeking green gas credentials should ask suppliers for documentation of the biomethane source and any certification framework applied, as there is no regulated certificate scheme for business gas equivalent to the REGO framework for electricity.

How we verified this

This article draws on the Gas Act 1986 at legislation.gov.uk, Ofgem's licensed gas supplier register and standard licence conditions published at ofgem.gov.uk, and the Electricity Act 1989 at legislation.gov.uk for the licensing comparison. The description of the SoLR process reflects Ofgem's published SoLR guidance and decision notices. No supplier marketing, broker, or aggregator content was used as a primary source.

Sources

• Gas Act 1986 - legislation.gov.uk
• Ofgem: Licensed supplier register - ofgem.gov.uk
• Electricity Act 1989 - legislation.gov.uk
• Ofgem: Supplier of Last Resort - ofgem.gov.uk

For related guidance, see Business Energy Suppliers UK and Supplier of Last Resort UK.