British Gas to post profits hike

Fury over recent rises in utility bills will be stoked on Thursday when the owner of British Gas is set to reveal that profits at its residential arm rose by a quarter.

Centrica's British Gas Residential is expected to post a 26% hike in profits to £352 million in the first half of 2012 as the UK's biggest energy supplier benefited from the cool start to summer and higher prices.

British Gas, which has 16 million customer accounts, dropped its standard electricity prices by 5% in January but they are still higher than a year ago after a 16% rise in August, when gas bills also went up by 18%.

The rise in profits means that British Gas Residential made nearly £2 million of profit a day, or some £3.70 per household per month.

Its haul is likely to rekindle anger over energy companies as consumers struggle to cope after the average dual fuel bill rose to £1,310 a year - more than £200 higher than two years ago.

One in five households is now in fuel poverty, defined as when 10% of disposable income goes to pay for electricity and heating.

Energy companies have been accused of quickly passing on rising wholesale costs to consumers but being slow to drop prices when they fall.

But British Gas's figures will benefit from weak comparatives with the previous year when unseasonably warm weather hit demand and it delayed passing on rising wholesale costs to customers, pushing the division to make a loss in its second quarter.

Richard Hall, head of energy regulation at Consumer Focus, said: "Wholesale prices rose a little earlier in the year but are now falling and they are still a long way from their peak in 2008.

"We have long questioned whether drops in wholesale costs find their way through to household bills. Only weeks ago, British Gas was hinting at further bill increases. With forecasts of rising profits for its domestic supply business, British Gas should at the very least put its customers' minds at rest by stopping this sort of rhetoric."