Centrica, the parent company of Britain’s largest energy supplier British Gas, stated today in its Interim Management Statement that the company performed well during the 2012-2013 unseasonably cold winter, and that they will use this benefit to maintain prices for consumers.
“This strong performance enables the business to continue to invest in customer service and price competitiveness and full year earnings growth is expected to be in line with market expectations” the statement read.
This news comes after a controversial pricing and profits year for British Gas. The company last raised its prices in November last year, when it announced a 6% increase that upped its annual average bill to £1,340. Shortly after this announcement, the energy giant announced a profit of 6%, causing many cash-strapped households to demand a break from soaring energy bills by way of a price decrease.
Recognising the pressure
After a long, cold winter, Centrica made note that “average residential gas consumption was18% higher in the first four months of 2013 than in the same period in 2012, and average residential electricity consumption was 3% higher.”
However, perhaps worried about another backlash similar to 2012, the company has decided to invest its profits and keep prices stable: “Recognising the economic pressures facing many of our customers, the Board has determined that any benefit arising from the exceptionally cold weather will be used to maintain our price competitiveness” reads the statement.
As expected, this is good news for consumers, who have been bombarded with news that energy prices have only one way to go: up. In March, the Office for Budget Responsibility (OBR) predicted energy bills would rise by £100 in 2013, and continue to go up in 2014. In that same month, Ofgem forecast that energy suppliers would triple their profits while consumers would continue to feel the squeeze of growing energy bills.
Ann Robinson, Director of Consumer Policy at uSwitch, said of Centrica’s announcement:
“This is welcome news when the majority of consumers are struggling to pay their household energy bills. British Gas has recognised the pressure facing customers and is using the financial gain from the extended cold weather to maintain its competitiveness. In plain English, this means that British Gas customers should expect no further increase in prices ast least for the foreseeable future.”
Warning against complacency
However, Robinson goes on to warn households against sitting back on a blip of good news during a tumultuous time in the energy market:
“Customers should still not be complacent. There is currently over £320 difference between the cheapest and most expensive energy tariffs on the market, and with significant differences creeping in on standing charges, it’s even more important that customers shop around the whole market as even greater savings can be made.”