British Gas announces price increases, Centrica profit down

Source: Exec Digital UK

Date :31/07/2008 10:14:28

British Gas announced yesterday, July 30, that gas prices will rise 35 percent and electricity by nine percent as it struggles to offset soaring energy costs.

The company’s dual fuel customers will see their bills increase by 25 percent, which means that the average household’s bill will rise from £1,055 a year, to £1,322.

Despite the significant pressure on household budgets, the supplier has denied that it is profiteering from the increases. Centrica, British Gas’ parent company, has published its first half results today, which show that operating profit has fallen to £992 million, from £1,226 million in 2007.

Earnings were also down at the group, from £786 million last year to £416 million in the same period in 2008. Centrica’s chief executive, Sam Laidlaw said: “The high level of current and forward wholesale gas prices necessitated an increase in retail tariffs by British Gas early in the year and then again at the end of July.”

British Gas has promised no further increases in gas prices this year but analysts at the company have warned that it may have to make alterations to prices again in early 2009. It has promised that its most vulnerable customers will avoid the price rise until after winter.

The announcement from the energy group has led to speculation that other energy companies will follow and by announcing similar rising prices in due course. So far, EDF has confirmed that its customers will be subject to 22 percent price increases.

E.On, npower, Scottish & Southern, and ScottishPower are expected to make announcements in the coming weeks.