British Gas slammed over price hike and profits
Energywatch has reacted angrily to the news that British Gas owner Centrica has made nearly £1 billion profit over the past six months. The figures were announced just one day after the company imposed a 35% price increase.
Adam Scorer, campaigns director at the independent gas and electricity watchdog, said: "British Gas customers, still reeling from 35% price hikes, might have expected Centrica to be losing money. They will be staggered at the rude health of Centrica's half-year profits.
"Customers will be outraged to learn that while they ponder how to make ends meet Centrica's shareholders are enjoying an increase in their dividends.
"Centrica has kept its promise to shareholders by delivering very strong half-year profits in gas production and storage and by doing whatever was necessary to recover its desired profit levels as a retailer as quickly as it can.
"Obviously, almost £1 billion profit in six months isn't the sort of profit Centrica wanted so it has raised gas prices by 35%. Consumers would love to be able to affect their bottom line so easily.
"The bottom line for consumers makes very grim reading. The £1,000 a year energy bill ceiling is well and truly breached.
He voiced concern for the growing numbers of people unable to cope with rising fuel bills: "Numbers in fuel poverty will explode this year. Households have some hard decision to make about stretched budgets.
"Centrica has been at the forefront of industry measures to help vulnerable consumers, and we welcome the measures announced yesterday, but they will only cushion, or delay, the impact of these price rises.
"Why are consumers being so hit by fuel rises? Because they are paying the price of broken energy markets in Europe and at home.
"In Europe the price of gas bears little relation to the true economic cost of gas, instead it reflects the high cost of oil.
"This week a powerful group of MPs identified that the domestic market is riven with problems that reduce competition. The consequence of that is suppliers such as British Gas are able to pass on costs to consumers and protect their profit margins far more easily than they should.
"Government, Ofgem and suppliers needs to take a hard and honest appraisal of their efforts to tackle fuel poverty. No-one can seriously maintain that the Government has a credible strategy to achieve its legal target to eradicate fuel poverty for vulnerable consumers in 2010 and for all consumers by 2016.
He concluded: "If the era of cheap energy is over, then the era of cheap solutions to fuel poverty is over as well. The Government will fail to meet its fuel poverty target for 2010.
"Unless its acts quickly there will be questions about whether it has effectively abandoned the fight."