Commercial Rate is the rate of production from a well that is commercially viable. It is the production which brings net income and is worth developing or the price at which production is done for commercial purposes. The production and consumption are monitored daily to keep the commercial aspect alive. We can even get the daily rates of production for oil and gas wells.
Commercial Rate is a statutory charge, the income from which is used to part-fund the annual revenue (day-to-day) expenditure of the local authority. Rates originated in the 19th century and are essentially a property tax on commercial premises.
There are currently three primary sources of local government financing which are universal amongst most countries. They are:
- Central Government; Grants
- Charges for Goods and Services and;
- Commercial Rates