Are British Gas's profits too high?

26 July 2012

Energy commentators are urging British Gas to cut prices ahead of winter after reporting a 23% increase in year-on-year profits.

British Gas reported operating profits of £345 million for the first six months of the year - up from £281 million a year earlier.

Energy comparison website uSwitch says the energy giant should make sure customers gets a share of the profits.

Cut prices before winter

Ann Robinson, director of consumer policy at uSwitch, says: "These soaring profits show that British Gas could and should cut its prices ahead of winter. This would go some way to acknowledging the pressure customers are under as they struggle to afford their household bills.

"It will also ensure that they too get to share the benefits of lower wholesale prices. With over eight in 10 households having cut down or rationed their energy use last winter because of cost, any reduction would be welcomed."

She continues: "As Britain's largest supplier, if British Gas cuts its prices other suppliers will be under pressure to follow suit."

She adds that this would "not only help customers to better afford their bills, but would also be an olive branch signalling the industry's true commitment to rebuilding trust and confidence with its customers".

British Gas increased its prices in December 2010 and August 2011 by 24.9% in total, or £256, but only cut them by 2%, or £26, in January this year.

The average annual household bill for a British Gas customer currently stands at £1,260 – on 1 January 2004 it was less than half at £543.

Add new comment