Energy customers face higher bills

Consumers are facing another round of energy price rises after the UK's biggest supplier revealed a further squeeze on its margins.









British Gas owner Centrica said the wholesale price of gas and power for delivery next winter is around 25% higher than last year, but the price paid by households has yet to reflect this higher price.



The company, which has around 16 million energy accounts, said its results for 2011 were likely to be "materially influenced" by the recovery of higher wholesale prices and other costs.



It said: "Market conditions for our residential energy supply business are significantly more challenging than in 2010."



A Centrica spokesman said the company had yet to take a decision about whether to increase tariffs.



The company pushed up bills by 7% after the coldest winter in 100 years but subsequently posted a 24% surge in operating profits to £742 million in 2010.









Centrica said increased profits from its exploration and production business were expected to more than offset lower profits from consumer-facing operations.



But it added that a decision by Chancellor George Osborne to increase the supplementary tax on oil and gas production from 20% to 32% in this year's Budget would offset the benefit of higher commodity prices.



It said in a trading update: "We continue to expect growth in our 2011 group earnings but at a more modest rate than anticipated at the time of our last results announcement as upstream profits have become more highly taxed."



The company has already warned the tax hike could mean that one of three fields in Morecambe Bay may not reopen following maintenance. Shares were 3% lower today.





Centrica said warmer weather this year, particularly last month, meant average residential gas consumption in the first four months of the year was 19% lower than the same period a year earlier, with electricity usage down 4%.



The number of residential energy accounts has grown in recent weeks to nearly 16 million accounts, slightly above the level at the end of 2010.



Ann Robinson, director of consumer policy at uSwitch.com, urged suppliers not to rush into another round of price hikes.



She said: "Clearly they are preparing the ground for a second round of price increases and consumers should definitely see this as a warning shot across the bows. That said, I would urge suppliers to hold fire for as long as they can.



"The price of oil has now fallen and the pressure suppliers are feeling could yet ease - given this I would urge them to keep a steady finger on the trigger and to protect consumers for as long as possible.



"It would be a shame for households to feel the pain of another round of price hikes if it later turns out to have been unnecessary."













In comments to the company's annual meeting, chairman Sir Roger Carr said Centrica was already a major contributor to the Exchequer, paying some £700 million in UK taxes.



He added: "Following changes announced by the Chancellor, UK tax levels for gas and oil are among the highest in the world.



"Sadly, it's probable that these changes will affect our plans to invest in the UK North Sea, which will have an impact on jobs and North Sea investment."



Sir Roger said the private sector had to front up the cash for investment but it was the Government that shaped the investment climate.



He added this would make it challenging to hit targets for £200 billion in private investment in low-carbon infrastructure by 2020.



The board was asked where it was likely to invest in the future, if not in the UK.



Sir Roger said Centrica was not "excessively adventurous" and that it would continue to focus on areas in which it had cultivated knowledge and experience, including North America and Trinidad & Tobago.



But Sir Roger emphasised the company's continued efforts to dissuade the UK Government from pursuing its North Sea tax policies.



Suggested Topics
News
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
News
i100

Other places that have held independence referendums
Sport
Jonas Gutierrez (r) competes with Yaya Toure (l)
football

Newcastle winger reveals he has testicular cancer - and is losing his trademark long hair as a result

PROMOTED VIDEO
Arts and Entertainment
Blossoming love: Colin Firth as Stanley and Emma Stone as Sophie, in 'Magic in the Moonlight'
film

Actors star in Woody Allen's 'Magic in the Moonlight'

News
peopleThe Times of India said actress should treat it as a 'compliment'
Arts and Entertainment
Maxine Peake plays Hamlet at Manchester's Royal Exchange
theatreReview: Maxine Peake brings emotional ferocity to Shakespeare's most starring part
News
news

Watch this commuter wage a one-man war against the Circle Line
News
We are phenomenally good at recognising faces; the study showed that humans have been selected to be unique and easily recognisable
science

Human faces unique 'because we don't recognise each other by smell'

Property
Home body: Badger stays safe indoors
lifeShould we feel guilty about keeping cats inside?
News
ebooksAn unforgettable anthology of contemporary reportage
News
A male driver reverses his Vauxhall Astra from a tow truck
news

Man's attempt to avoid being impounded heavily criticised

Arts and Entertainment
US pop diva Jennifer Lopez sang “Happy Birthday” to Gurbanguly Berdimuhamedow, president of Turkmenistan
musicCorporate gigs become key source of musicians' income
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
filmsDaniel Craig believed to be donning skis as 007 for first time
Student
The Guildhall School of Music and Drama is to offer a BA degree in Performance and Creative Enterprise
student

Arts and Entertainment
Pulp-fiction lover: Jarvis Cocker
booksJarvis Cocker on Richard Brautigan
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Recruitment Consultant - Soho - IT, Pharma, Public Sector

£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Payroll & Accounts Assistant

£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week