The UK’s largest energy company has been slammed for making almost a billion pounds in profit while householders struggle to afford to keep their homes warm.
British Gas has defended the £969 million profit it made after caps on energy price rises rose, allowing it to make more money from household bills, claiming it is a "one-off" recovery of costs.
But fuel poverty campaigners and MPs have slammed the profit as "indefensible" and "obscene" in light of the cost of living crisis hitting British families.
Profits almost £900m more than last year
In the same period last year, British Gas reported a profit of £98 million, representing a nearly £900 million increase.
About half (£500 million) of the company's profit was due to changes to the price cap made by energy regulator Ofgem.
However, Chris O’Shea, the boss of Centrica, British Gas’s parent company, insisted the profits were not a sign of things to come.
He stated: “We would not expect to see profits anywhere near this level [in the future], it really is a one-off… It’s important that people understand that it’s simply a recovery of costs that we incurred in the past.”
So why did customers have to shiver through winter?
These profits have prompted anger from political groups that people were left suffering whilst gas company's revelled in record profits.
Emi Murphy, Warm Homes Campaigner at Friends of the Earth, said it is "indefensible" that energy firms are making billions in excess profits, adding: “There’s no acceptable reality where an energy company should see profits rise by nearly 900% over the same period millions struggle to afford to power and heat their homes.
“It’s indefensible that firms behind both our soaring bills and the deteriorating state of the planet are still raking in billions in excess profits.”
Simon Francis, Co-ordinator of the End Fuel Poverty Coalition, said: “These profits are a further sign of Britain’s broken energy system.
“At a time when household energy debt is spiralling to record levels and energy bills remain double what they were just a few years ago.”
Labour MP Zarah Sultana tweeted: “British Gas just reported record profits: £969,000,000 in 6 months, nearly 10x what it made last year.
“Your sky-high bills are their obscene profits. It's time to bring energy into public ownership, running it to meet your needs, not their greed.”
The Energy Price Cap was originally introduced by the government in 2019 to limit how much firms can charge consumers for their energy, and ensure households on default tariffs pay fair gas and electricity prices.
However, energy price rises in Europe forced Ofgem to increase the energy price cap to stop energy companies from going out of business.
The government also introduced the Energy Price Guarantee in October after Ofgem's Price Cap surged to £3,549, which could have made energy unaffordable for many families.
Energy firms were compensated for the difference between wholesale gas and electricity prices and the amount they charged customers.
Ofgem claim profits are a 'one-off'
However, these record profits have been claimed to be an anomaly after these energy companies' relative struggles over the previous years.
An Ofgem spokesperson justified the profits, stating: “After four years of loss-making, the energy retail sector is expected to return to profit this year. The profits we’ll see in the energy retail sector for the first half of this year are a one-off as suppliers recoup some of the significant costs and losses they incurred over recent years due to Covid and the Russian invasion of Ukraine.
“We have been clear they must not pay dividends until they are financially robust enough to weather future shocks. We’re closely monitoring levels of customer service, support and financial adequacy and can and will act where suppliers are found lacking.”
