Gas Prices Remain High Despite Increased Profits

British Gas, which trades as Scottish Gas in Scotland, has reported a 30% rise in profits to £574 million for the year ending 31 December 2015.

Gas usage rose by 5% in 2015 despite the warmest UK December on record, as 2015 had more normal temperatures compared with a very mild 2014.

Ian Conn, Chief Executive of Centrica – which owns the British/Scottish Gas claimed that the rise in profits was ‘not because of the fall in commodity prices’ and that the drop in wholesale costs had been passed on to customers.

Last week British Gas, the UK's largest energy supplier, said it was cutting gas prices by 5.1%, the last of the big six energy suppliers to do so after E.On, EDF, SSE, Scottish Power and Npower, which all cut gas prices by around 5%.

However, David Hunter, energy analyst at Schneider Electric, said that despite these reductions by Britain’s Big Six energy providers, consumers are still paying too much adding:

“The Big Six have only just completed a full round of gas-only price cuts but the results have been disappointing. With prices reduced by only 5%, standard tariffs are little more competitive than before and still a long way off the huge fall in wholesale prices. The profits announced from British Gas raise further questions about why more hasn’t been done to make energy prices truly competitive across the board.”

Added Ayrshire & Arran MP Patricia Gibson:

“With ‘default’ standard tariffs still up to £450 a year more expensive than the best deals, far too many people are still missing out on substantial savings and are being left out of pocket as a result.

“The message to take from this is simple: shop around to find one of the many more competitive offers available from the 37 companies now trading in the wider market.

"Furthermore, if you can afford to, invest the savings from those deals into energy efficient measures at home, like low energy lighting, or towards buying a greener car. Not only does this safeguard future family budgets but the action taken will force suppliers to compete more effectively.”

In the 1990s after a series of huge price and record-profit announcements by British Gas, Alex Salmond MP supported public and staff protests over the 900% wage increases paid to then British Gas chief executive Cedric Brown.

British Gas was the original de-nationalised utility energy provider of the Thatcher-era government in the 1980s and became a by-word for corporate fat-cats. It is still lapping up the corporate cream in 2016!