British Gas profits go through the roof
By Sarah Wood | 27th July 2023
The parent company of British Gas has reported an eye-watering increase in half-year profits.
Profits for Centrica's UK household supply arm are up by almost 900% - with underlying earnings at British Gas increasing to £969m, compared to £98m last year, as reported by Sky.
The company said the bulk of the growth was down to a reduction in debt-related costs. Regulator Ofgem's price cap provides an allowance for debt on energy bills which can't be recovered and is written off.
Centrica said £500m was brought in under the scheme during the first six months of the year.
Energy firms saw their profits fall last year, following Russia's invasion of Ukraine.
The energy price cap is £1,000 above the pre-pandemic average, despite oil and natural gas costs falling. It is predicted to remain around £2,000 a year on average for the coming winter.
A spokesperson for Ofgem said the energy retail sector is expected to return to profit this year, after four years of losses. It said the profits in the first half of the year are a one-off, as suppliers recoup some of the costs and losses incurred due to the pandemic and the Russian invasion of Ukraine.
But the campaign group End Fuel Poverty Coalition said the profits will be "greeted with disbelief by those struggling through the crisis".
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