‘Cold-snap profits to keep fuel bills in check’

Centrica announced it would 'maintain' its 'price competitiveness'. Picture: PA
Centrica announced it would 'maintain' its 'price competitiveness'. Picture: PA
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THE owner of Scottish Gas has said that it will use any financial benefits generated from this year’s lengthy period of cold weather to hold prices steady for “as long as possible”.

Centrica, the parent company of British Gas, announced it would “maintain” its “price competitiveness” following an 18 per cent rise in gas and a 3 per cent jump in electricity consumption over the long winter.

The utility – one of the “Big Six” energy firms – made the announcement ahead of its annual general meeting, telling shareholders its British Gas residential business was on course to deliver full-year profits in line with 
expectations of £602 million.

Consumer groups welcomed the announcement, saying it should mean Scottish Gas customers avoiding hikes in energy prices for “the foreseeable future”. However, they warned that the sector’s pricing policies remained unclear and unaffordable for customers.

“This is welcome news when the majority of consumers are struggling to pay household energy bills,” said Ann Robinson, director of consumer policy at uSwitch.com. British Gas has recognised the pressure facing customers and is using the financial gain from the extended cold weather to maintain its competitiveness.” But she warned that households should “not be complacent” and should continue to look around for a better deal.

Which? executive director Richard Lloyd expressed concerns over how long bills would remain low. “With inflation-busting price hikes and eye-watering profits, it’s no wonder less than a quarter of people trust the industry and rising energy prices consistently remain one of consumers’ top financial worries. With a big leap in gas use over the winter, huge numbers of people will be shocked by their next bill.

“Ofgem’s recent proposals for simpler tariffs don’t go far enough to keep prices in check. The government should take more radical action to provide not just simpler, but fairer bills.”

British Gas last hiked its gas and electricity prices in November by 6 per cent, or £80, taking its average household bill to £1,340 a year.

In the statement released to the Stock Exchange yesterday, Centrica said: “As a result of the unusual period of extended cold weather, average residential gas consumption was 18 per cent higher in the first four months of 2013 than in the same period in 2012, and average residential electricity consumption was 3 per cent higher.”

It added: “Recognising the economic pressures facing many of our customers, the board has determined that any benefit arising from the exceptionally cold weather will be used to maintain our price competitiveness.”

A company spokesman said: “We will use that to effectively hold prices for as long as possible.”