The estimated amount each household pays towards the cost of running the gas network rose from £118.53 a year in 2021 to £163.69 a year from 1 April 2024, an increase of 38%, according to a report published in March 2024 by the Warm This Winter campaign and Future Energy Associates1. The cost of running the network is charged to customers through gas unit costs and standing charges1.
The report states that a solely inflationary-linked increase over the same period would have taken the figure from £118 to £139, an 18% rise, citing the Bank of England inflation calculator1. It adds that gas unit costs paid by households more than tripled at the height of the energy bills crisis, and that even after the latest Ofgem price cap change every unit of gas remains 73% above 2021 levels1. Daily gas standing charges have also continued to rise and will not peak until the coming months, reaching 15% above 2021 levels from 1 April 20241.
The report examines who owns the firms running the gas infrastructure. The gas transmission network is run by National Gas, owned by a consortium of Macquarie Asset Management, British Columbia Investment Management Corporation and National Grid plc (20%)1. Macquarie also part-owns Cadent, described as the UK's largest regional gas distribution network company, which supplies gas to 11 million homes1. The gas distribution network is ultimately owned by eleven firms, and of the significant owners of gas infrastructure operators just one company is headquartered in the UK, with the others including the sovereign wealth funds of Qatar and China and investment firms and pension funds from Australia, Canada, Germany, Hong Kong and the USA1.
"Once again the British public is being gaslighted by an opaque and broken energy system which sees huge amounts of obscene profits going overseas and inflates bills for ordinary people who are still paying 60% more than they did three years ago."
The report says Gas Distribution Networks operate as natural monopolies, and that reliance on long-term cost forecasting, the informational advantage firms hold over their costs and their ability to hire lobbyists and consultants risk regulatory decisions favouring the industry1. Its recommendations for Ofgem include immediate consumer rebates by network companies to address profits not in consumers' interests, the use of real market data instead of long-term forecasts, and empowering consumer bodies to request price control reviews where financial returns are excessive1.
Why it matters for households
Network costs sit inside the standing charge and unit rate a household pays for gas, so they are part of the bill regardless of how much gas is used. The report's figures put the network element at £163.69 a year for the average household from 1 April 2024, against £118.53 in 20211. Because the network is a monopoly, a household cannot choose a different operator for the pipes; the cost is recovered through the regulated charges built into bills under the price cap. For a home weighing up how much its heating, hot water and cooking actually cost to run, the split between unit rate and standing charge matters, and the appliance running costs guide sets out how to work that through. The ownership structure described in the report also bears on energy sovereignty: most of the significant owners of the operators are headquartered outside the UK1.
What happens next
Starting from 2026, energy consumers could face an annual bill increase of up to £43 to fund the decommissioning of the gas network, as set out in a new Ofgem consultation on price controls for gas and electricity transmission networks1. The report's recommendations on rebates, market data and consumer representation have been put to Ofgem for consideration1. No decision dates on those recommendations have been reported.
Sources1 cited
- Hikes in gas network costs see vampire funds profit from energy crisis, endfuelpoverty.org.uk