£533m profit, but British Gas won't cut bills

Centrica, British Gas's parent company, described the 3-million-a-day profit as a one-off and said results would now fall as wholesale gas became more expensive.

Consumer campaigners demanded that the utility pass on some of its profits to customers by reducing bills, insisting that there was still considerable scope for this to happen.

A spokesman for the independent consumer watchdog, Energywatch, said: "UK businesses and households are paying too much for their energy and prices should be coming down now. There is plenty of room for more cuts."

But British Gas warned that this was "unlikely", insisting that there was too much uncertainty over wholesale prices for the company to take that risk.

Centrica's chief executive, Sam Laidlaw, said wholesale gas prices had begun to rise again, mainly due to recent spikes in oil prices, which reached a record high yesterday.

He said: "The second half of the year will be much tougher. Looking forward from today, price cuts are unlikely. Wholesale gas prices for the coming winter are high and there is still uncertainty over the level of price volatility and customer demand due to unpredictable weather patterns."

Centrica's half-year profits, unveiled yesterday, follow a positive statement from Scottish & Southern Energy last month flagging up a good start to the financial year. Industry experts said that, taken together, the two announcements suggested it could be a bumper year for energy companies but not such a good one for customers.

The row over fuel bills was sparked by the announcement by British Gas, which includes Scottish Gas, that it returned to the black. British Gas recorded a profit of 533 million for six months following losses of 143 million a year earlier.

A spokesman for Energywatch said it was wrong to suggest that British Gas had made so much money simply by failing to reduce its bills for customers.

He said British Gas had reduced its bills, but the company had started from a position of being one of the most expensive suppliers. So although bills had come down considerably, they had a long way to fall.

He added that Energywatch expected bills from all providers to come down in the future. He said: "There is clearly room for some further significant cuts to prices. What are they waiting for?"

This message was reinforced by the Scottish Consumer Council. Trisha McAulay, its head of corporate resources, said: "We would want Scottish Gas to demonstrate that these profits have not been produced by a refusal to pass on wholesale gas prices to the consumer.

"We would always encourage people to shop around and switch, but it is the most vulnerable people who don't switch."