British Gas profits jump 600 per cent - as customers face energy price rises of 15 per cent

British Gas is to unveil record profits of nearly £700million at a time when millions of customers have been hit by vastly increased bills.

The figures represent a rise of more than 600 per cent on the £95million the business made in 2006.

And they will add momentum to claims of profiteering by the power giants.

Gas and electricity suppliers cashed in last year because they failed to pass on the full value of falls in wholesale costs to customers.

By contrast, the industry has been quick to impose dramatic increases on bills following very high rises in wholesale costs in the last few months. Some bills have gone up by 15 per cent.

The British Gas figures, which will be unveiled within weeks, are part of a wider picture of profiteering which has seen several other firms, including Germanowned NPower and E.on, generating tens of millions of pounds in extra revenue.

Shell is expected to announce annual profits of £13.5billion next week.

Consumer group Energywatch believes such profits are evidence the energy market is rigged against the public.

It is demanding a Competition Commission investigation into concerns that the market is controlled by a "big six" group of suppliers which locks out rivals offering cheaper power.

The six companies are British Gas, E.on, Npower, EDF, Scottish Power and Scottish & Southern Energy.

Energywatch chief Allan Asher said: "These profits show the price rises are unjustified and inflicting considerable pain on consumers, especially those who can least afford it.

"It's the very evidence that should prompt a Competition Commission inquiry."

Energywatch argues there is no reasonable explanation for the recent sharp increases in wholesale costs.

In theory, there should be plenty of gas flowing into Britain at a reasonable price via new undersea pipelines and in shipments of liquefied natural gas from the Middle East.

Energywatch points out that the high prices suit the parent companies of the big six suppliers because they also own gas fields and power stations and so are making a killing from the spike in prices.

British Gas is part of Centrica, which is expected to report a profit of more than £2billion for 2007.

Industry expert Joe Malinowksi, of TheEnergyShop.com, believes a profit of approaching £700million is likely for British Gas.

"It would blow all previous annual profits out of the water," he said.

The high bills are causing major problems. The number of customers cut off because they are behind on their bills has trebled in two years to 176 a week.

Npower, which is owned by RWE of Germany, is the worst offender. It has been cutting off 69 homes a week, up 418 per cent in two years.

The company's 2007 profits are expected to rise more than 300 per cent to around £500million.

Npower, like other firms, also imposes higher tariffs for those using a prepayment meter. These customers are generally the least able to afford higher bills.

The National Housing Federation, which represents housing associations, wants pre-payment meter charges to be the same as standard credit tariffs.

A spokesman said: "It's outrageous energy companies can make such massive profits, yet continue to charge their poorest customers the highest rates."

British Gas said its profit margin in the second half of last year was a modest 1 per cent.