Analysis · Daily index
UK Energy Cost of Sales Index
Every day we track what a typical UK energy tariff actually costs to buy and deliver to a home, if a supplier locked in the price today, before they add overheads and margin. It’s the biggest part of any tariff, about 90% of it.
How to read this
Two numbers, and the gap between them. The lower figure is the cost of sales, what the energy costs to deliver. The upper figure is the most a supplier could charge under the Ofgem price cap. The gap is the headroom: the wider it is, the more cheap fixed deals appear; when it tightens, the good deals start to disappear.
Cost of sales · 1Y fixed dual fuel · GB avg
The cost of sales of a 1-year tariff
© EnergyCode™ 2026
Cost of sales
£1,398 /yr
medium consumption · ex VAT
Headroom vs cap
£165
below cap · 10.6%
Lowest fix vs cap
£26
below cap · 1.7%
Day on day
— £0
0.0%
Week on week
▼ −£2
-0.1%
YTD 2026
▲ +£264
23.3%
This week· 4 JUNE 2026
Cost of sales moved this week.
Medium-band cost of sales held flat at £1,398 a year. Year to date it’s risen by £264. This cost of sales is around 90% of what makes up a typical energy tariff, so the tariff now costs a supplier roughly that much more to buy than at the start of the year. The Ofgem price cap sets the most a supplier can charge a household at £1,563 (exc. VAT) a year, leaving £165 of headroom above our cost of sales. That headroom is what covers everything else a supplier spends to serve the customer, like customer service, marketing and day to day running costs, plus their profit margin. At £1,537 a year, the lowest market fix tracked here sits just £26 below the Ofgem cap.
How the figure moves
Energy costs aren’t one fixed number; they’re a stack of moving parts, each on its own clock. Wholesale reprices through the day; network charges, policy levies and operating costs all shift at different points across the year. Put together, they’re what a supplier has to pay to hedge and buy a year’s energy: the real cost of delivering the tariff.
Headroom vs cap
Cost of sales
Week £ move
Cost of sales · by network
Where the 14 GB networks sit this week
At medium consumption, cost of sales is £1,398/yr, up £264 year to date. It’s lowest in East Midlands at £1,350/yr and highest in Manweb at £1,466/yr. The table below breaks down all 14, sortable by any column.
Showing medium band·2,700 elec · 11,500 gas kWh/yr
| Region | YoY | |||||
|---|---|---|---|---|---|---|
East Midlands NGED | £1,350 | ▼ £2 | — £0 | ▼ £113 | ▲ £263 | —soon |
London UKPN | £1,351 | ▼ £4 | ▼ £1 | ▼ £115 | ▲ £262 | —soon |
Eastern UKPN | £1,375 | ▼ £2 | — £0 | ▼ £114 | ▲ £266 | —soon |
West Midlands NGED | £1,378 | ▼ £2 | ▼ £1 | ▼ £114 | ▲ £265 | —soon |
Norweb ENWL | £1,380 | ▼ £1 | ▼ £1 | ▼ £107 | ▲ £263 | —soon |
Southern SSEN | £1,395 | ▼ £2 | — £0 | ▼ £112 | ▲ £270 | —soon |
Scottish Power SPEN | £1,400 | ▼ £3 | ▼ £1 | ▼ £116 | ▲ £266 | —soon |
| GB average | £1,398 | ▼ £2 | ▼ £1 | ▼ £113 | ▲ £264 | —soon |
Yorkshire NPg | £1,403 | ▼ £3 | ▼ £1 | ▼ £116 | ▲ £264 | —soon |
Northern NPg | £1,404 | ▼ £2 | ▼ £1 | ▼ £113 | ▲ £264 | —soon |
South Eastern UKPN | £1,409 | ▼ £2 | ▼ £1 | ▼ £112 | ▲ £269 | —soon |
Scottish Hydro SSEN | £1,411 | ▼ £1 | ▼ £1 | ▼ £108 | ▲ £264 | —soon |
South Wales NGED | £1,420 | ▼ £2 | ▼ £1 | ▼ £113 | ▲ £263 | —soon |
South West NGED | £1,432 | ▼ £1 | ▼ £1 | ▼ £109 | ▲ £263 | —soon |
Manweb SPEN | £1,466 | ▼ £4 | ▼ £1 | ▼ £117 | ▲ £261 | —soon |
Technical Insight · May 2026
Summer, without the dip
Cost of sales is running firm this May, which is unusual for the time of year. Energy normally eases through summer, yet costs are holding up, kept there by global conditions and continued conflict in the Middle East feeding a risk premium into wholesale gas. It is worth remembering how a one-year fixed works: it blends a single summer and a single winter season, and a contract starting now opens on the lower summer half. Strike the same deal six months from now and it leans into winter, where the forward curve sits a good deal higher. The usual summer softening simply is not there this year, and on current signals, waiting carries a cost.
Furqan Aziz
Founder & Chief Architect
Analysis & commentary
For expert analysis and commentary, or media enquiries, get in touch.
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The engine behind the number
Everything on this page is one output of the EnergyCode Pricing Engine. It runs on the full GB cost stack, DNO charging statements, Ofgem caps, NESO and Elexon data and the energy codes themselves, so suppliers, brokers and large consumers can build and price a whole tariff region by region, every cost sourced and dated, right down to the unit rate and standing charge.
About this report
- Tariff term
- 1-year fixed, dual-fuel domestic tariff. Modelled as locking in on the first of the subsequent month for the following 12 months.
- What “cost of sales” means
- What it costs to deliver a year of energy, built bottom-up from the published components: wholesale, network charges, policy levies and published operating items like the Smart DCC metering charge. Excludes supplier overheads, customer acquisition, margin and VAT. It also excludes Warm Home Discount.
- Updated
- The headline figure is refreshed every day with the latest market data; the chart shows the weekly trend. GB average with a per-DNO regional table. £/year, ex VAT.
Sources & attribution
Figures are EnergyCode-derived analysis. You may reference or reproduce them in editorial, research or internal work without prior consent, provided you attribute EnergyCode and link to www.energycode.ai/tools/tracker. For commentary, methodology questions or data access, media enquiries can be sent to [email protected]. The “Lowest market fix” line is the exception: an external benchmark, not our analysis. It tracks the lowest dual-fuel tariff on the market at each point, drawn from Ofgem’s Retail Market Indicators through March 2026, then the lowest fixed deal on the Uswitch comparison site from April 2026 onwards. Shown for context only.
Disclaimer
The figures represent EnergyCode’s analytical view of the cost of sales for a representative tariff on the date shown. Wholesale prices move daily; this is a snapshot, not a forecast. The report is provided for informational purposes and does not constitute advice. EnergyCode accepts no liability for decisions taken on the basis of this information. The “Lowest market fix” line is an external point-in-time benchmark of the lowest dual-fuel tariff on the market for typical direct-debit consumption: Ofgem’s Retail Market Indicators through March 2026, then the lowest fixed deal on the Uswitch comparison site from April 2026. It is not an offer or recommendation.