British Gas owner to use profits to keep energy bills down

Centrica, the owner of British Gas, says it will prevent energy bill increases using profits from the recent cold snap. But it’s an empty promise if you ask me.

Centrica, owner of British Gas, is on course to make a big profit this year thanks to the sustained cold weather.

UK residential gas consumption was 18% higher in the first four months of 2013 while electricity was 3% higher compared to the same period in 2012.

Higher consumption coupled with higher prices (British Gas hiked the cost of gas and electricity by 6% in November last year) has put a strain on many households with customers struggling to pay their bills.

But the owner of British Gas has indicated that it will use any benefit from the cold weather to prevent any more price rises. The company stated in its Interim Report:

“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.” 

No.1 concern

The reassurance comes at the same time a new report shows that rising utility bills are the single biggest concern for people in the UK.

The report from Nielsen found that 31% of people are worried about rising utility bills and 14% are worried specifically about rising fuel costs.

Utility bills come ahead of the economy (23%), rising food price (22%) and debt (19%) worries.

Sceptical

But personally I am a bit sceptical about this vague promise from Centrica.

When I asked for further details of exactly how it would help customers with their bills a Centrica spokesperson replied with the vague statement that it would hold energy prices "for as long as possible".

If you ask me that just means until Centrica decides prices need rising again to help boost profits, probably before the onset of another harsh winter.

The spokesperson told me that as we are only four months into the year it was hard to say what would happen with external costs like transport and implementing Government green schemes, which could affect prices later on. So no solid promises can be made about how long prices could stay the same.

It seems then that rather than a generous turnaround, British Gas is just trying to clean up its image with empty promises.

After all since British Gas managed to bag 28,000 new customers in the first four months of the year, it has to think up a few ways to keep them interested!

What do you think?

Will struggling households benefit from Centrica's profits? Or is this just an empty promise?

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