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Buoyant British Gas fuels hope of cheaper energy
30.07.09
British Gas customers were today hoping for lower household energy bills after owner Centrica reported an 80% jump in profits at its residential supply arm.
The residential business raked in £299 million for the six months to the end of June against £166 million in the same period last year.
However, overall profits at Centrica were down 5% to £936 million as its production business was hit by the falling price of wholesale gas.
The rise in profits at British Gas followed huge price hikes in 2008 and a cold snap early this year which boosted demand for gas and electricity.
British Gas lost customers after the price rises but has won many of them back since cutting gas and electricity bills by 10% this year.
Ann Robinson, energy expert at uSwitch.com, said: “This increase in profit probably does mean that customers can expect relative price stability for a while. If they are going to change, it is more likely there will be cuts rather than increases.”
Centrica chief executive Sam Laidlaw said price changes depend on the wholesale gas price, supply from Ukraine, and the weather.
Reader views (2)
British reduce prices, don't be daft.
Prices have come down by 60% but they have only reduced prices by 10%.
They put prices up very quickly and that's where they stay.
- Ann Louisa, southampton
The core issue is that retail prices don't reflect wholesale prices. SME customers couldn't access wholesale prices this past winter, which meant they were locked into high prices, although the wholesale rates fell by over 60%.
- Gas Guru, London
