Energy News

Energy bill rises unlikely as British Gas profits double

Wednesday 28 July 2010

By Dominic Welling - dominic.welling@consumerchoices.co.uk

Are Autumn gas and electricity price hikes on the back burner?

British Gas profits rose 98% over the last year from £295 million in the first half of 2009 to £585million today.

The bumper profits have raised the spectre of price hikes being unlikely.

In February, the company reduced its residential gas prices - its third price reduction in 12 months. Now, British Gas has said its prices had fallen by nearly a fifth in the last year.

The company says the average British Gas bill has declined from 2009 levels, despite the fact that the UK experienced one of the coldest winters on record during the first quarter of 2010.

The company said in its annual statement: “While energy efficiency measures led to a reduction in underlying energy consumption, average gas consumption and electricity consumption increased by 8% and 3% respectively due to the exceptionally cold winter.

“This was offset by lower average tariffs due to price reductions, leading to the average customer bill being slightly lower than in the previous year.”

In addition, British Gas said that during the first six months of the year it gained 223,000 new customers, including more than 50,000 households that signed up for both energy and services such as boiler care.

Speaking on BBC Radio 4’s Today programme, Sam Laidlaw, chief executive of British Gas’s parent company Centrica, said: "This is a competitive market, so we can't give any signals, but our position has always been to lead the market down and try to delay any price increases as long as we can."

However, talking to the Telegraph, Nick Luff, Centrica's finance director, gave a warning that there will be pain to come for energy customers by claiming "wholesale gas and power prices are looking quite a lot higher for this coming winter."

If wholesale bills are higher then this will inevitably be reflected in consumers' energy bills over the winter.

British Gas now offers the cheapest standard dual fuel prices - the average household bill for a dual fuel British Gas customer has dropped from £1,202 to £1,157 this year.