British Gas announced a sharp jump in profits yesterday, enraging consumer groups who accused the energy giant of squeezing hard-pressed families with inflated bills.
Profits at the country's biggest gas and electricity supplier soared 23 per cent in the first six months of the year to £345m. That works out at £1.9m profit each day for the firm, which is owned by Centrica.
It means the energy company pocketed an average of 3.64p a month in profit from each of its 15.8 million UK customers.
Meanwhile, hard-pressed families have faced soaring bills. British Gas increased prices in December 2010 and August 2011 by 24.9 per cent, or £256 in total. It did cut them by 2 per cent, or £26, in January this year, according to figures published by uSwitch.
The average household energy bill for a British Gas customer has still climbed 14.5 per cent – or £160 – since January 2011, the comparison site calculated.
The increase has pushed more people than ever into fuel poverty, which is defined as when 10 per cent of their disposable income is spent on heating their homes. Some one in five households are now estimated to be in fuel poverty. Which? executive director, Richard Lloyd, said: "Many people are struggling with rising energy costs and, when they see suppliers announcing big profits, they question whether they're paying a fair price for their energy."
Caroline Flint, Labour's Shadow Energy Secretary, slammed the rising profits. "People will not understand why just a couple of months ago British Gas was threatening more price hikes this winter, while it has seen profits soar," she said.
"The public will be getting a raw deal if they are forced to stomach even higher bills and bear the cost for investment in our energy infrastructure, while the big energy companies get away with making more profits and paying out more to their shareholders."
Sam Laidlaw, chief executive of Centrica, said: "The profit is a reasonable level for a business that's capital hungry. We need to make a return for investment in the likes of smart metres."
The group reported a profit hike of 14 per cent to £767m.
Mr Laidlaw tried to damp down anger by pointing out that British Gas is only a small part of the Centrica business. "We are a diversified group now, with British Gas less than a quarter of group profit," he said. "But it's still the most talked about. We understand why but sometimes people blow it out of proportion by picking out one number."
He refused to talk about prices but Ann Robinson, director of consumer policy at uSwitch, said: "The soaring profits show that British Gas could and should cut its prices ahead of winter. This would go some way to acknowledging the pressure customers are under as they struggle to afford their household bills.
"It will also ensure that they, too, get to share the benefits of lower wholesale prices.... Any reduction would be welcomed."Reuse content