THE parent company of Scottish Gas has come under fire after it
announced a multimillion-pound jump in profits sparked by people
turning up the heat during the cold snap at the start of the year.
The supplier's residential arm, which raised its tariffs by 6% in
December, said profits had hit £356 million for the last six months, a
rise of 3.2% from last year.
Overall, Centrica's operating profit rose 9% to £1.58 billion for the
period to June 30, up from £1.45bn for the same months in 2012.
Glasgow MP John Robertson, a member of the energy committee at
Westminster, branded the profits announcement disgusting and
shameless, coming days after energy companies were criticised for a
lack of transparency.
Mr Robertson said: "After hitting its customers with a 6% price
increase it is galling that profits have passed £1.5bn.
"If British Gas executives are lining their pockets with profits from
anywhere at all in the business they should think about those
choosing between heating and eating and consider passing something
onto their customers and dropping energy prices.
"Ofgem needs to use its teeth and demand to take a good look at the
accounts out today. If British Gas is profiteering from its customers
then Ofgem needs to take immediate action."
Average residential gas consumption was up 13% while electricity usage
rose 1% over the period, compared with last year.
Nick Luff, Centrica's finance director, defended the £11m rise in
profits, saying it represented just 70p per customer, and refused to
rule out further price increases.
The profits rise as a result of the cold weather was partly offset by
higher commodity prices and a new duty to deliver energy efficiency
measures in customers' homes, which drove environmental costs up 37%.
Mr Luff sought to shift part of the blame for any upcoming rises to
the Government-backed Energy Companies Obligation scheme.
He said the scheme, under which customers are helped with boiler
repair or replacement or insulation costs, would inevitably impact on
customer bills.
Mr Luff said: "We will keep prices as low as we can for as long as we can.
"If prices do have to go up, we will delay it for as long as possible."
Mike O'Connor, chief executive of Consumer Futures, formerly known as
Consumer Focus Scotland, called on Centrica to use its profits to
avoid passing on further costs to consumers.
He said: "Centrica, like other major suppliers, has benefited from the
cold winter and the greater levels of demand.
"Wholesale gas prices have not risen significantly and its gas
production and much of its generation business has done well. Those
factors should give British Gas confidence to hold its prices."
The company's announcement comes days after MPs warned that lack of
transparency about profits and energy prices were leaving consumers
with deep mistrust towards suppliers.
Mr O'Connor added: "Energy companies have to make profits, but that
should happen in a market that is fair, competitive and transparent.
"As MPs pointed out this week, consumers have reason to question
whether the market is competitive and we cannot be surprised consumers
do not trust that this market is working in their best interests. That
will be acutely true for the millions of households in fuel poverty."
Tom Lyon, energy expert at uSwitch.com, said: "People are already
starting to worry about next winter and the cost of their bills and
high energy prices have a big impact on consumers.
"This is why we would urge suppliers to reduce the pressure on
consumers by guaranteeing that they won't hike prices this winter."
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