Sarah is our insurance specialist, reporting the latest important developments in the industry.
** British Gas owner Centrica has reported a pre-tax profit of £1.3 billion in the last six months. **
Despite huge profit margins, this figure was actually 19% down on the same time last year for the company.
Audrey Gallacher, Director of Energy at Consumer Focus, said:
"Centrica seem to win whether wholesale costs are high or low. Retail profits margins may have been reduced by recent increases in wholesale prices – but as they are also major gas and electricity wholesalers, they can still make healthy profits at the other end.”
"Consumers will be more worried by their increasing bills than which part of an energy company makes the most money. Given Centrica profits remain strong; consumers are bound to question whether recent large price hikes were necessary.”
British Gas recently announced plans to increase prices by over 20%, adding a potential £200 to annual dual fuel bills.
The leading energy supplier announced that the price of standard gas would increase by 18% and electricity by 16%. The increased prices will come into affect as of 18th August 2011.
The price hike could have a damming affect on consumers as the cost of living continues to soar. The price hike will affect around 9 million households at a time when people are struggling to get by as it is.
British Gas claims to have been making a loss on the price of gas since April due to the rising cost of gas on the wholesale market.
The energy supplier is not having much luck financially after it was announced yesterday that they have been fined £2.5million by energy watchdog Ofgem. This is said to be due to poor customer service and failing consumers generally.
British Gas is the second company to announce price hikes after Scottish Power recently did so.
Since then, Scottish and Southern Electric (SSE) have also announced an increase to the price of gas and electricity.
If you are concerned about how this will affect your household bills, compare energy suppliers to find a cheaper tariff.