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British Gas price rises to "boost flagging profits"

Published on : 28/07/2011

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Centrica, the company which owns British Gas, has raised the price of its gas and electricity bills to boost the company's flagging profits, according to the BBC.

It reports that Centrica's price hikes - of 18% for gas and 16% for electricity - are directly designed to offset dwindling profits.

The company has blamed rising wholesale prices for the fuel bill rises - but Centrica actually generates much of its own energy.

According to the BBC, the company's operating profits are down by 19% - yet it is still raking in a staggering £1.3 billion. It's overall statutory profit is down by 64%.

The real problem for consumers being asked to pay more for energy bills, though, is that Centrica has increased its dividend by 12% on the back of the price rises - so whilst customers are being squeezed, shareholders are making money from their misery.

The Government is currently trying to get the Big Six energy suppliers to simplify their tariffs, whilst Ofgem is investigating the companies over their selling techniques and potential "price fixing".

In the meantime, energy minister Chris Huhne has advised consumers to compare gas and electricity prices and change provider if they can find a cheaper deal on their gas and electricity bills.

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