Windfall tax calls intensify as Scottish Gas owner Centrica flags big profits

Centrica, owner of the Scottish Gas and British Gas brands, has flagged annual earnings at the top end of targets amid intensifying calls for a windfall tax on energy companies.

In a trading update, the group said it has been boosted by “strong” volumes across its nuclear and gas production operations.

Meanwhile, its trading business has also increased volumes of gas and renewable energy to improve UK supply amid pressure from the conflict in Ukraine.

Energy bills for UK households have surged after the price cap was increased by 54 per cent to £1,971 per year by regulator Ofgem due to volatile wholesale prices. It is predicted that the price cap could jump again to as much as £2,900 in October.

Nevertheless, Chancellor Rishi Sunak held firm in his opposition to a windfall tax on Monday, arguing that it would “deter investment at a time we need it most - not least in renewable energy”.

That followed record multi-billion-pound quarterly profits from oil producers BP and Shell.

Centrica said that its British Gas Services & Solutions business has been hit by “some supply chain disruption and higher inflation” which has affected its costs and customer demand.

“We expect those headwinds to continue to at least partially offset underlying operational progress for the duration of this period of higher inflation,” the group told investors..

Centrica has flagged annual earnings at the top end of its targets.

The company also warned that there are still “significant uncertainties” regarding its performance over the year, including the impact of weather, commodity price movements and the potential for higher bad debts.