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Energy price rises help British Gas reach £600m profit

The gas and electricity company is expected to announce large profits for 2013 this Thursday

Centrica is thought to have made a profit of £2.5bn in 2013

Centrica is thought to have made a profit of £2.5bn in 2013

Updated – Full story here.

Centrica, the company which owns British Gas, is this week expected to announce profits of £2.5bn for 2013, an increase of 2% compared to the previous year.

British Gas’ household supply branch is likely to unveil a £600m profit, in part due to energy price hikes which were implemented last November. Despite this impressive figure, profits fell by 2% compared to last year as a mild winter resulted in less energy usage.

Customers of the energy giant are unlikely to react positively to the announcement, particularly as independent energy supplier Ovo Energy recently put its rates down following lower wholesale prices due to mild winter weather.

Small suppliers topping best buy tables

Stephen Fitzpatrick, chief executive of Ovo Energy, recently told Director magazine that more needs to be done to ensure the energy market is competitive.

“The government should be focusing more on competition – and not just competition among the same six companies,” said Fitzpatrick.

“I think Ofgem should have a mandate to reduce the big six’s market share – if you want transparency, it’s about letting new entrants into the market,” he added.

Shares in Centrica fell by 3% last week, following suggestions from Energy Secretary Ed Davey that British Gas may be broken up in a bid to create a more competitive energy market.

‘Yet again we see an energy company making profits on the back of […] hard-pressed customers’

Shadow Energy Secretary, Caroline Flint, commented: “Yet again we see an energy company making huge profits on the back of spiralling bills for hard-pressed customers.

“The reason the energy companies think they can get away with treating their customers so poorly is because they know David Cameron will never stand up to them.”

A spokesperson for the Department of Energy said: “While we don’t comment on individual companies’ results, we are pushing for much greater openness and transparency in the financial reports of all energy companies so that consumers know exactly how their money is being spent.”

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