BRITISH Gas made record profits in the first half of 2023 following the June price cap increase.
It is another blow for customers struggling to make ends meet with the cost of living.
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The energy giant’s owner Centrica said British Gas made nearly £1billion in profits.
Figures soared by almost 900% with its gas and electricity arm leaping to 889%, totalling £969million in the six months leading up to June 30.
British Gas said the increase is largely thanks to Ofgem’s energy price cap which allowed it to recoup some of the losses it faced last year.
In total, Centrica made a £6.5billion profit in the first six months of 2023 compared with a £1.1billion loss in the same months in 2022.
Centrica said: “All suppliers had to purchase a portion of their electricity and gas at levels above the price cap.
“Allowances to recover this cost were introduced into the price cap from April 2022, with recovery continuing into the first half of 2023.”
Last year, energy suppliers saw their profit margins take a hit when wholesale prices rose and customers had some support from the price cap.
Now prices have slightly dropped and the new price cap has allowed British Gas to recover some of those earlier losses.
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But the slight drop doesn’t mean households are no longer struggling and the profits are yet another blow to those finding it hard to make bill payments.
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, the profits posted will be greeted with disbelief by those struggling through the crisis.”
British Gas isn’t the only energy provider to make profits amid the cost of living crisis.
EDF’s annual profits hit £1.12billion in 2022 – compared to a loss of £21million in 2021.
The boosted profits come as the French energy giant sold its electricity generated at a higher price.
But EDF Energy, the UK’s domestic supply arm, lost £200million last year.
While oil giant BP made £4billion of profits in the first three months of the year, sparking a fresh debate about how firms have cashed in on the energy crisis.
The mega profits — equivalent to about £45million a day — beat City expectations by more than half a billion pounds, as Labour called once more for a stricter windfall tax.
Liberal Democrat leader Sir Ed Davey said: “It beggars belief that after all these months this Conservative Government is still allowing energy firms to rake in extraordinary profits while millions of families struggle.”
It comes a day after Ofgem revealed a raft of proposals to reform the UK power market.
Under the proposals, firms will have to offer customers struggling to pay bills payment holidays.
Companies will also have to provide 24/7 emergency support for customers cut off from their power or gas supply due to issues such as meter faults.
The full list of proposals includes:
- requiring supplier customer service lines to stay open longer, including evenings and weekends
- requiring suppliers to offer a greater variety of contact methods such as email and web chat
- offering more support for customers struggling with bills, including early intervention to identify and offer support such as temporary repayment holidays when customers can’t pay
- prioritising customers in vulnerable situations
- making 24/7 emergency support available for customers who are cut off from their power or gas supply due to issues with their supplier (e.g. meter faults)
- asking suppliers to make information on customer service performance better available
What help you can get with energy bills
Millions of households are being issued with cost of living payments to cover essentials such as energy bills and food.
The £900 payment has been split into three instalments worth £301, £300 and £299.
The first was already paid across April and May, with the second due in autumn and the third in Spring 2024.
You are eligible for the payment if you receive the following benefits on certain dates:
Millions of pensioners are set for a £150-£300 top up on their Winter Fuel Payment from November this year as well.
You’ll be eligible for the boost if you qualify for this year’s Winter Fuel Payment.
You are eligible for this if you were born before September 25, 1957.
Meanwhile, a number of energy suppliers offer customers grants if they are struggling to pay their bills.
This includes British Gas, EDF, Scottish Power and Octopus Energy.
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