Responding to Centrica and British Gas’s interim profit figures out today, Audrey Gallacher, Director of Energy at Consumer Focus, said:
‘Hard pressed consumers will be shocked to see such a big rise in profits when British Gas has been warning of the need for price increases.1 The disconnection between profits and prices risks deepening consumer distrust over energy bills. Wholesale prices rose slightly at the start of the year but have fallen and are now a long way from their peak.
‘Our economy needs profitable companies, but energy is an essential service we all need to heat our homes and keep the lights on. So customers need to know they are being charged a fair price through a competitive and transparent market. Customers need guarantees that falls in wholesale prices will be passed on as fairly and quickly as rises in wholesale prices. They also need commitments from British Gas in the light of these profit figures that there will be no customer price rises this year.2’
Notes to editors:
- Centrica’s interim management statement in May spoke of the pressure from higher wholesale costs and the upwards trend for consumer prices.
- E.ON has already committed to no price rises in 2012 and SSE has committed to no price rise before October 2012 at the earliest.
- Please see our wholesale vs retail pricing charts for more information on price movements. The wholesale numbers in our charts are obtained by averaging out the prices paid on the market for a mixture of medium and long-term contracts. They aim to broadly replicate how suppliers might be purchasing but are most useful as an indication showing rises and falls in the wholesale price which is more in line with what suppliers pay than the spot day price.
- The average wholesale price for gas is now 60p/th and for electricity is 47£/MWh. This is about 20% down on 2011’s peak prices of 73p/th for gas and £60/MWh for electricity.
- The Big 6 suppliers reduced their retails prices by an average of 3.3% for gas and 1.8% for electricity this Spring, following price increases in Summer/Autumn 2011 of an average 17.4% for gas and 10% for electricity
- British Gas cut its electricity prices by 5% in January 2012, following price rises of 18% for gas and 16% for electricity in August 2011.
- The average annual energy bill is now £1,258. It was £1,294 in January 2012, and £1,110 in January 2011. Therefore the average annual energy bill is still 13.3% higher than January last year.
- The average annual energy bill for a British Gas customer is now £1,260. It was £1,286 in January 2012, and £1,100 in January 2011. Therefore the average annual energy bill for a British Gas customer is 12.7% higher than January last year.
- British Gas’s profits for the first six months of 2011 were £270m, first half of 2010 – £585m, first half of 2009 – £295m, first half of 2008 – £166m.