UK: British Gas profits rise 3.2% following price rise ahead of the big freeze
- Credit: PA
British Gas owner Centrica saw profits from its residential energy arm rise by 3.2% to £356million as it cashed in on the freeze in the first half of the year.
The supplier pumped up earnings from the bitterly cold weather after raising tariffs by 6% in December.
The announcement that British Gas Residential saw profits from its energy supply increase from £345m in the same period last year is likely to spark anger.
It has already pledged that it would use higher revenues over the period to put a lid on more tariff increases for the time being but campaigners have called for the company to go further and cut prices.
Centrica chief executive Sam Laidlaw said: “With our customers using more gas to stay warm during the unusually cold winter, we’re doing everything we can to help them keep their energy costs under control and make bills simpler and clearer.”
Average residential gas consumption was up 13% while electricity rose 1% over the period, compared with last year.
The profits rise as a result of the cold weather was partly offset by higher commodity prices and a new duty to deliver energy efficiency measures in customers’ homes, which drove environmental costs up 37%.
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Nick Luff, Centrica’s finance director, sought to shift part of the blame for any future tariff rises to the Government-backed ECO (Energy Companies Obligation) scheme.
He said the scheme, under which customers are helped with boiler repair or replacement or insulation costs, would “inevitably impact on customer bills ultimately”.
Mr Luff would not rule out a further tariff increases this winter, saying there remained “upward pressure on costs” while volatile wholesale gas prices could also be a factor.
“We will keep prices as low as we can for as long as we can for as long as we can. If prices do have to go up, we will delay it for as long as possible.”
He defended the £11 million rise in profits, saying it represented just 70p per customer.
British Gas Residential profits contributed to a 9% overall increase in earnings for Centrica, from £1.45billion to £1.58bn. Revenues were up 14% to £13.7bn for the company, which includes activities in energy generation and storage.