British Gas and Ofgem set to go head-to-head
Centrica, which owns British Gas, is expected to reveal a drop in profits this week, whilst Ofgem is in line to issue a report suggesting energy suppliers’ profits have increased
According to an article in the Telegraph, British Gas’ parent company Centrica is expected to unveil a drop in profits this week, on the same day energy regulator Ofgem will publish data which suggests energy suppliers have seen earnings increase.
Analysts are predicting that British Gas, which is the UK’s largest energy supplier, will announce a drop of close to 25% for the earnings of its retail division for the first six months of 2014. The company is likely to blame mild winter weather and increased competitiveness in the energy sector, for the fall in profits.
Ofgem: Suppliers making £100 profit per household
In stark contrast, Ofgem is likely to reveal data which implies the big six energy suppliers will make about £100 per household for the next 12 months. Centrica has previously stated that it made half of that amount per household over the last year and estimated this number would fall in 2014.
The gulf in difference between the two figures is likely to further perpetuate the distrust many consumers feel towards the energy industry.
Full energy market review underway
The news comes just as the Competition and Markets Authority (CMA) has begun its 18 month investigation into the gas and electricity market.
The CMA last week issued an initial report in which it considered a number of areas of concern in the current energy sector. These included the dominance of the big six, uncompetitive pricing and a lack of competition within the market.