Soaring energy profits provoke anger

31 July 2013

Consumer groups have reacted with outrage at the announcement of bumper profits from energy companies British Gas (£356m) and EDF Energy (£903m).

British Gas in particular has come under pressure to cut its prices to customers. Britain's biggest energy provider reported a 3% jump in year-on-year operating profits - up from £345 million in the first six months of last year to £356 million for the first half of 2013.

However, it was keen to play down the amount of money it had raked in, stating that increased revenue from higher gas demand has been largely swallowed up by rising commodity costs and network and environmental charges.

Yet today's profit announcement follows the move in November 2012 to hike its gas and electricity prices by 6% or £80, taking the average dual fuel bill up from £1,260 to £1,340 a year.

In May 2013, when British Gas gave an update on its mid-year performance, it said it would use any benefit from the long winter to maintain its price competitiveness - although it failed to commit to a price freeze.

Energy switching website is now calling on the company to freeze its prices for the rest of the year.

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Price freeze

Tom Lyon, energy expert at the switching website, said: "The fact that British Gas has absorbed increasing costs so far this year will be of cold comfort to consumers who may be fearing the worst - especially with rumours of price rises. Profits are up from last year, so we would urge British Gas to help quell customer's fears and go one step further from its May pledge and commit to a price freeze for the rest of the year."

Last winter, almost 69% of households went without heating at some point to keep their energy bills down, he added; while 39% said cutting back on energy usage was affecting their quality of life or health.

Meanwhile, a report by the Energy and Climate Change Select Committee of MPs published on Monday stated that energy regulator Ofgem is failing to make energy firms more transparent about their profits.

Friends of the Earth energy campaigner Guy Shrubsole said: "MPs have hit the nail on the head - more needs to be done to stop Big Six profiteering at the expense of hard-pressed households and the planet.

"The energy companies continue to rake in huge profits while the government fails to insulate our heat-leaking homes and keeps us hooked on the gas that's sent our fuel bills spiralling."

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