Coldest Winter For 120 Years Helps British Gas Profits Increase By 21%
The cold winter and a rise in prices looks set to push British Gas profits to over £720 million.
Experts in the City expect British Gas profits to be up by 21% – an increase of £130 million compared with 2009.
British Gas has 16 million customers and it’s thought that the cold snap alone will have increased profits by £80 million. Just as people started to turn up their heating as the cold weather set in, British Gas added to their woes by introducing a 7% increase in gas and electricity tariffs.
Meanwhile Centrica, owner of British Gas, is expected to announce profits of around 50% to £2.3 billion.
Not only did British Gas benefit from the cold November/December in 2010 but there was also a cold snap in January last year which also helped to increase profits. It means that City experts expect British gas to announce profits of around £724 million and suggest this will lead to a Competition Commission Inquiry.
Speaking from M&C Energy Group, David Hunter said the government should encourage new energy businesses into the market to increase competition. Meanwhile the managing director of energy analysts Saturn Energy, John McShane, said “We all recognise that we have to pay for the energy we use, but we also want to be sure the price we’re paying is a realistic one”. He added that it wasn’t just domestic energy users who needed to be sure they were paying a fair price but “with energy costs catching up or overtaking staff costs for many businesses – it’s time for greater transparency all round”.
Speaking from Consumer Focus, Richard Hall questions whether it is “fair if British Gas announces bumper profits so soon after customer price rises” and there are calls for energy suppliers to be more open about their costs and margins. However, a British Gas spokesman said the recent price rise only came into effect on 11 December and as a result it only had a “small impact on the financial results”.
It seems to be more important than ever to compare electricity and gas prices to ensure you are on the most competitive rates available. This is important for everyone whether they are a domestic energy user or a business energy user.