The change emerged as British Gas announced a drop in pre-tax first-quarter profits to pounds 605m from pounds 651m a year earlier. The company said: "Our performance in this quarter was affected first by continuing loss of market share in the industrial and commercial markets for gas in the UK, principally as a result of deliberate regulatory policy, and by warmer weather. The continuing regulatory constraints are hampering our ability to truly compete in this market."
British Gas's share of the business market has fallen below 40 per cent and is being eroded by the day. The company fears that similar decimation will occur in the domestic market when it is fully open to competition in 1998.
Ofgas declined to comment on the removal of published price schedules. But Peter Bryant, vice-chairman of Utilicorp, one of the main rivals to British Gas, said: "I think British Gas would significantly regain market share by using its market power to undercut the competition. We are in a transition stage and there still needs to be some control." It is likely that Ofgas would monitor the market closely for a year and retain the ability to re-impose published prices if needs be.
In the first three months of the year, British Gas's turnover fell to pounds 3.1bn from pounds 3.7bn in the same period last year. Earnings per share fell to 13.9p from 15p a year ago. The effect of warmer weather accounted for pounds 28m of the total drop in profit compared with the first quarter last year.
British Gas shed 2,400 jobs in the three months as part of the restructuring of the UK gas business.
The company is bracing itself for confrontation with shareholders over executive pay at its annual meeting on 31 May.Reuse content