British Gas owner Centrica hints at more price rises

Centrica warned that a new duty to pay for energy efficiency in customers' homes, which has cost it £1.4bn, would “inevitably impact on customer bills ultimately“

British Gas owner Centrica hinted at more price rises for hard- pressed customers as it said residential profits had risen 3.2%, thanks to the icy spring.

Earnings increased to £356m in the first half of 2013, as the group cashed in on bitter weather after raising tariffs 6% in late 2012.

Revenues from household gas supply went up 16% to £3.7bn, compared with 2012, as Britons tried to keep warm. Average residential consumption by volume was up 13% for gas and 1% for electricity.

Operating profit at parent company Centrica were up 9% from £1.45bn to £1.58bn. The results sparked anger and calls for British Gas to keep a lid on tariffs.

Profits would have been higher, but for a new duty to pay for energy efficiency in customers’ homes, which helped put environmental costs up 37% .

Centrica warned that the scheme, which has cost it £1.4bn, would “inevitably impact on customer bills ultimately“ and that it was facing “upward pressure on costs“. Finance director Nick Luff said: “We will keep prices as low as we can for as long as we can.”

He defended the �11m increase in profits for British Gas residential energy supply as just 70p per customer. The company serves 11 million households, with nearly 16 million customer accounts.

It pointed out that its profit margin for the residential business had fallen from 7.2% to 6.5% and it had increased profits this time only because of the weather.

But Len McCluskey, general secretary of the Unite union, said: “These profits will anger a growing number of families who are struggling to pay the bills, made worse when the fuel companies hiked their charges last year.

“There should be a commitment from British Gas and the other fuel providers, all of whom have done very well out of the British people, to cut prices for customers this coming winter.”

Consumer Futures chief executive Mike O’Connor called on Centrica to peg prices. He said: “Wholesale gas prices have not risen significantly and their gas production and much of their generation business has done well.”

MPs have spoken of deep distrust in energy firms over tariffs and profits. On Tuesday, French- owned EDF said profits had hit a record �903m.

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