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British Gas Owner Centrica Defends Price Rise And Predicts Profits Of £1.4bn

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BRITISH GAS
British Gas to make £455m in profit thanks to a colder 2012 leading to a gas consumption rise | Alamy

British Gas owner Centrica is set to make profits of £1.4 billion this year, making it the second energy supplier to announce profits at a time when customers are struggling to pay their increasing bills.

The company, which will increase its energy bills by 6% from 16 November, is on track to meet the City's expectations for year-on-year growth in earnings.

Analysts also predict around £575 million of pre-tax profit from its British Gas residential arm, after gas consumption for the first 10 months of 2012 was 9% higher because of colder than normal weather.

Centrica, which makes most of its profit from upstream gas and oil exploration, provides gas and electricity to almost 16m households in the UK.

Its trading update comes after rival SSE reported a 38% jump in half-year profits on Wednesday to nearly £400m.

Rising energy bills were blamed on the increased costs British Gas is forced to pay on carbon reduction targets and upgrading the UK's gas and electricity grids.

Centrica also blamed a 13% rise in wholesale gas prices for this winter - something which may anger consumers given the ongoing furore over alleged fixing of wholesale gas prices.

The average UK residential gas consumption for the first 10 months of 2012 was 9% higher than for the same period of 2011, while average electricity consumption was 1% lower, according to Centrica's figures.

'This reflects colder than normal weather in the year to date following an unusually warm 2011, but also underlying reductions in demand due to energy efficiency measures undertaken by customers," the group added.

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Filed by Charlie Thomas
 
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