British Gas and Ofgem back for Round 2

The energy supplier has hit out at Ofgem for issuing ‘misleading’ figures with regards to retail energy profit margins

 

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British Gas and Ofgem go for round two

Centrica, the parent company of British Gas, has criticised Ofgem for issuing a report which estimates that the supplier stands to make £106 per household, pre-tax, in the year ahead. A rise of 50% compared to the previous 12 months.

British Gas has stated that due to warm winter weather and a self-imposed energy price freeze for the rest of the year, the company stands to make a pre-tax profit of £51 per household.

The energy supplier recently announced that it lost 180,000 customers in the first five months of 2014.

‘What’s important is that we provide stable prices for our customers’

Speaking to the Daily Mail, the outgoing Chief Executive of Centrica, Sam Laidlaw, dismissed recent calls for energy companies to lower their energy prices and said cuts would only happen if the “opportunity allowed”.

“What’s important is that we provide stable prices for our customers,” said Laidlaw.

Tariffs linked to wholesale prices not popular

Many have demanded that energy companies drop their prices to match the fall in wholesale energy costs, however, the big six have yet to do so.

It has been speculated that this is due to the Labour party’s pledge to freeze energy prices should it win the next General Election.

This could potentially block retail energy prices at rates at levels too low for companies to turn a profit. A claim which has been denied by British Gas.

Laidlaw said that customers had been offered tariffs which reflected energy prices in the past, however, they had not been very popular. Customers, he said, are more interested in fixed price plans at the moment.

Laidlaw also commented on Ofgem’s profit estimates and told the Telegraph they were “theoretical” and “confusing for the customer”.

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