Outrage as Centrica reports profits of £1.3bn
Utility giant Centrica faced more public outrage today after reporting £1.3 billion in half-year profits - including £270 million for its residential arm British Gas - just weeks after announcing a price hike
But Centrica said adjusted operating profits in the six months to June 30 at British Gas fell by 54% compared to the same period last year as it battled with a 30% increase in wholesale gas prices and lower consumption.
British Gas, the UK's biggest energy supplier, plans to lift gas and electricity prices by an average of 18% and 16% respectively from August 18.
Centrica, which also operates an upstream gas exploration business and a US residential arm, posted a 19% decline in adjusted operating profits from £1.6 billion in the same period last year.
The hike comes at a time when household incomes are becoming increasingly squeezed by high inflation and muted wage growth.
Centrica said the price increases were necessary in order to offset the wholesale gas hike.
But critics have raised doubts over the impact of rising wholesale prices - with independent lobbyist Consumer Focus claiming they remain around a third lower than their 2008 peak.
Some nine million customers will be hit when the supplier raises the average dual fuel bill by £190 a year to £1,219, pushing the average monthly bill to £101.58p.
Energy regulator Ofgem has started an inquiry into how prices are set after stating that tariffs seemed to respond much quicker when wholesale prices go up.
Centrica has frequently defended itself as one of the most transparent suppliers in the market.
It is also committed to investing in its energy networks, with more than £15 billion of spending pledged for the next decade on nuclear, wind farms and gas-fired generation. Ofgem has said £200 billion of investment is required between now and 2020 to secure Britain's energy supply.
Higher wholesale gas prices will benefit Centrica's upstream oil and gas production business.
The upstream division includes the offshore Morecambe Bay gas field, where Centrica recently shut down one of the three fields after the Government raised taxes on North Sea production.
