British Gas slammed over huge profitsIt reveals profits up 500%, just after bills hiked
21 February 2008
British Gas has come under fire after the residential customer side of its business recorded a rise in profits of 500%.
Parent company Centrica today revealed the energy giant’s consumer arm made annual profits of £571 million in 2007, up from £95m in 2006.
The news comes a month after British Gas hiked the energy bills of 13 million customers by 15%.
Centrica said its record profits haul followed a ‘year of two halves’ for its residential business.
The vast majority of the profit - £533 million – had come in the first half of the year before an increase in wholesale energy prices.
Following a spate of complaints about customer service, Centrica said improvements to service, and more competitive pricing, had helped British Gas claw back 200,000 customers in the second part of the year.
Centrica defended the decision to increase energy bills last month.
It argued that its British Gas division would now be making a loss if it had not made the move.
But industry watchdog Energywatch has hit out at the huge surge in profits.
Hike in bills for 13 million British Gas customers
Energywatch Director of Campaigns Adam Scorer said: ‘No-one is going to argue that energy companies don't need to make a profit.
‘However, British Gas customers will want to tear their hair out when they hear the scale of these profits and compare them with their own rising bills.’
He added: ‘It is perfectly true that there is volatility in wholesale energy markets. But it seems equally true that such volatility hits consumers not shareholders. Consumers will feel justified in claiming that they are being taken for a very rough ride by energy companies.’
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