Centrica fuelled anger over energy bills today by revealing its British Gas residential arm made profits of £595 million last year – up 58% on 2008.
The group said British Gas, the UK’s biggest energy supplier, achieved the profits haul due to the addition of 141,000 gas and electricity customers and following operational improvements.
The result comes amid mounting concern that utility firms were not quick enough to pass on falls in wholesale gas prices last year.
Centrica revealed a 7% drop in total group underlying operating profits to £1.86 billion as declines in wholesale gas prices saw dwindling returns from its upstream production business.
Industry watchdog Ofgem said this week that energy firms have boosted margins by £30 for each typical dual fuel customer in the last three months as wholesale energy costs fall.
British Gas claimed the average dual fuel customer paid £23 more last year, which offset a 7% decline in gas demand as the recession bore down on households and businesses.
Despite the soaring profits at British Gas, lower wholesale gas prices had a bigger downward effect on production profits than the boost given by the residential business, leaving the wider group’s earnings down on 2008.
Centrica also warned that wholesale prices are forecast to rise again during 2010, although not to levels seen during the oil price bubble in 2008.
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