Consumer groups urge British Gas to freeze energy bills for the rest of the year as profits rise to £356m
Consumer groups are urging British Gas to freeze energy bills this winter, after the company’s owner Centrica reported a rise in profits following last winter’s record-breaking chill.
Centrica reported a 9% increase in profits to £1.58bn for the first six months of the year for its entire business spanning power generation and supply.
Profits in the residential arm of British Gas were up 3% to £356m from £345m, as the company reported that gas consumption was 13% higher per customer during the cold weather.
British Gas caused an outcry when it hiked prices by 6% at the start of last winter, prompting the company to promise in May that it would use profits to maintain energy tariffs at their current levels.
Centrica’s chief financial officer Nick Luff said that residential gas sales had not resulted in “a significant increase in profit”, but did not give a specific pledge not to raise energy bills this winter.
“What I can do is assure you that we will keep our prices as low as we can. It is in our interests to have competitive prices, we want to attrract new customers, and if prices do have to go up we will delay that for as long as possible.” Centrica has added 50,000 new residential customers since the start of the year, he added.
The company blamed environmental costs and the wholesale price of gas for increasing costs.
But consumer groups urged British Gas to freeze energy bills for the rest of the year. Tom Lyon at uSwitch.com, said: “The fact that British Gas has absorbed increasing costs so far this year will be of cold comfort to consumers who may be fearing the worst – especially with rumours of price rises. Profits are up from last year, so we would urge British Gas to help quell customer’s fears and go one step further from its May pledge and commit to a price freeze for the rest of the year.”
“People are already starting to worry about next winter and the cost of their energy bills and high energy prices have a big impact on consumers. Last winter, almost seven in ten households went without heating at some point to keep their energy costs down.”
Luff said that the “most significant part of what makes up an energy bill is the wholesale price of gas”, a market where prices are volatile. Consumer groups have accused the energy companies of cherry-picking data on gas prices to make them appear a bigger factor in consumers’ bills than they really are.
The earnings data comes after an influential committee of MPs criticised energy companies for failing to give customers adequate information about their pricing policies. The energy and climate change select committee said on Monday it was not surprising customers mistrusted energy companies because they had failed to be transparent about the reasons for energy price rises, in an energy market that was not as competitive as it could be.