British Gas Profits Rise By 24%

British Gas boosted it’s year on year profits by 24%, lifting its operating profits from £598 million to £742 million.

The residential arm of British Gas saw its profits rise by 24% during the last twelve months, helped by the exceptionally cold weather and by adding 267,000 residential energy customer accounts to its books.

The company says that average gas consumption increased by 11% and average electricity consumption increased by 2%, as the cold winters at the start and end of 2010 forced consumers to spend more on heating their homes.

British Gas also raised it’s in December by 7% or £44 for gas and 5.8% or £24 for electricity, pushing its average annual household bill up to £1,097.

These profits are causing considerable comment amongst industry commentators and consumer groups. For example, Ann Robinson, Director of Consumer Policy at uSwitch.com, said:

“Soaring profits will be cold comfort to British Gas customers who were slapped with a price hike at the beginning of the winter and have been feeling the impact ever since.”

“The reality is that over three quarters of consumers (76%) have cut down or rationed their energy usage this winter because of cost – a 7% increase on last year”.

Robinson went on to remind consumers that “they do have a choice – they should look for a better price and a fairer deal, saving up to £458 in the process”. Switching energy suppliers is easier than many people think.

Consumer Focus, the statutory consumer champion for the UK, acknowledged that it is healthy for the economy to have successful energy companies, however advises customers to “consumers may look at today’s profits and at recent prices rises and question how one justifies the other.”

Consumer Focus is urging suppliers and the regulator to work together to provide greater clarity and transparency on energy pricing, in order for consumers to be able to have more trust in the energy market.