British Gas Profits More Than Double To £595m
British Gas operating profits leapt 58% last year to to £595m – up from £379m in 2008, parent company Centrica has announced.
The news will further fuel anger over energy bills, following accusations that utility firms were not quick enough to pass on falls in wholesale gas prices last year.
However, Centrica said British Gas profits rose due to the addition of 141,000 gas and electricity customers and following operational improvements.
“The numbers look big, but remember we’re looking after one in two homes in Britain,” British Gas managing director Phil Bentley told Sky News.
“It’s actually only about £3 profit per household per month after tax.”
Industry watchdog Ofgem said this week that energy firms had boosted margins by £30 for each typical dual-fuel customer in the last three months as wholesale energy costs fell.
However, British Gas was the first of the big six energy providers to cut prices last year and also led the way recently with a 7% reduction in gas bills.
“The gas we’re burning today to heat our homes we bought nearly two years ago, when prices were much higher, so there’s a time lag,” Mr Bentley said.
“Secondly our profits are up on where they were in 2008, which was a massively volatile year.”
Mr Bentley added that the winter had been much colder than expected – adding to the firm’s earnings.
Centrica said it realised 2009 was a “difficult year for many of our customers” and said it aimed to help people manage and reduce energy use in their homes.
Philip Cullum, deputy chief executive of Consumer Focus, called for an immediate price cut following the announcement of the British Gas profits.
“Energy companies have taken advantage this winter, while more than six million UK households live in fuel poverty and face a desperate struggle to keep warm,” he said.
“That British Gas has been the only major energy supplier to cut standard prices over the past seven months demonstrates a market largely devoid of competitive pressure.
“Energy companies seem not to care about providing value for money.”
As a whole, Centrica’s operating profit was down 7% on 2008 at £1.86bn, with a fall in wholesale gas prices slashing returns from its upstream production business.
Centrica has warned that wholesale prices are forecast to rise again during 2010, although not to levels seen during the oil price bubble in 2008.
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Source : Yahoo News.
