A commodity price is the market cost of the underlying energy itself, such as electricity or natural gas, before any fixed fees, taxes, or contract discounts are added. In a tariff, it is the variable or fixed rate that pays for the raw product you consume.
This term matters because it often determines how sensitive a contract is to market movements. In fixed-price plans, the commodity price is locked for the contract period, which makes bills more predictable. In indexed plans, it follows a market formula, so the final price can rise or fall with wholesale energy conditions. When comparing offers, the commodity price should always be read alongside fixed charges, contract duration, and usage patterns, because a low headline rate can still lead to a higher total bill.