Scottish Gas owner sees 23% rise in profits
Boost in Centrica’s profits
THE owner of Scottish Gas increased profits at its residential arm by 23% today in a move fanning flames of anger over recent price hikes.
Centrica said profits at British Gas Residential, which has 15.8 million energy accounts in the UK, lifted to £345 million in the six months to June 30 after volumes were boosted by the cool start to the summer.
But the UK’s biggest energy supplier also benefited from higher prices because, while it dropped its standard electricity prices by 5% in January, this did not cancel out a 16% rise in August, when gas bills also went up by 18%.
Consumer Focus has accused utility companies of being quick to pass on rising wholesale costs to consumers but being slow to drop prices when they fall and today’s bumper profits haul is likely to provoke further outrage.
The rise in profits means that British Gas Residential made some £1.9m of profit a day as consumers struggle to cope after the average dual fuel bill rose to £1,310 a year – more than £200 higher than two years ago.
Richard Hall, head of energy regulation at Consumer Focus, said: “We have long questioned whether drops in wholesale costs find their way through to household bills.”
Centrica said higher volumes and tariffs more than offset the higher commodity prices and other costs.
But it claims to control just 15% of a customer’s bill through its operating costs and profit margins.
Chief executive Sam Laidlaw said: “Centrica has performed well in the first half of 2012 despite challenging market conditions, although the increase in earnings must be placed in the context of unusually low levels of consumption and profits in the UK in the first half of 2011.”
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