British Gas owner hints bills could rise for second time this year

Centrica, the owner of British Gas, has hinted that bills could go up for a second time this year, after reporting a 20% drop in profits at its consumer arm and more customer account losses.

British Gas, the UK’s biggest energy supplier, lost 341,000 customer accounts in the UK in the first half of the year, although the rate of losses slowed. Operating profit at the business fell to £430m.

Centrica said it was keeping its tariffs under review, noting that wholesale energy prices had continued to rise since it increased its prices in April, and that a number of its rivals had raised their tariffs.

The 5.5% price rise in April, taking the average bill to £1,161 a year, affected 4.1 million out of 7.5 million British Gas customers, and prompted criticism from the government and consumer groups.

Centrica said it still had 3.5 million customers on standard variable tariffs – usually the most expensive – although the number is down from 4.3 million at the start of the year.

The company said it was encouraging customers to switch to one of its cheaper fixed-term tariffs. It has withdrawn the SVT for new customers, and 428,000 accounts have moved on to the new safeguard tariff for vulnerable customers.

The government’s cap on all standard energy tariffs including SVTs is expected to come into force at the end of this year. A price cap for vulnerable households already came in early last year.

Iain Conn, Centrica’s chief executive, reiterated concerns that some customers would end up paying more once the wider cap comes in.

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“Prices may well bunch around the level of the cap, so some of the cheaper deals in the market may disappear, which means that some customers will end up paying more,” he told the BBC. Conn suggested ending the SVT instead.

Centrica’s overall adjusted operating profit fell 4% to £782m. The group’s shares were one of the biggest fallers on the FTSE 100 after the results were announced, losing more than 5%.

During the cold snap in February and early March, when the “beast from the east” brought large parts of the UK to a standstill, British Gas incurred additional call-out costs of £15m. It had its busiest week for boiler repairs.


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