British Gas profits surge 889% to £969million as Brits continue to struggle
British Gas has reported record profits of £969million in the first six months of this year - up from £98million a year earlier.
The energy giant, owned by Centrica, said the earnings at its gas and electricity arm jumped by 889%.
But the company claimed the huge profit was not due to higher energy prices - instead, it said it was down to a rule change by energy regulator Ofgem which raised the allowance energy firms could claim for costs incurred during the pandemic.
This allowed British Gas to recoup losses seen a year earlier - to the tune of about £500million.
Overall, Centrica swung to a £6.5billion operating profit in the first six months of the year against operating losses of £1.1billion a year earlier.
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Centrica reported underlying operating profits of £2.1billion for the first six months of the year, up from £1.3billion a year earlier.
At the same time, fellow gas and oil giant Shell reported that it had seen a drop in its adjusted earnings in the three months to the end of June when compared to the same period a year ago.
Adjusted earnings reached just under $5.1billion (£3.9billion) in the three months - down from $11.5billion (£8.9 billion) a year earlier.
Shell said the drop was because it had also been selling less fuel and making lower profits on refining.
Energy firms saw their supplier profit margins hit last year when wholesale prices soared after Russia's invasion of Ukraine.
Thankfully, the UK's price cap protected customer bills from the worst of the rises.
Due to the price cap being much lower than wholesale costs, Centrica said it lost about £250million in the first six months of 2022. ]
The announcement of their record profits comes as households continue to face some of the highest energy bills the UK has ever seen.
The Ofgem price cap now, which is in place until September, sits at £2,074 - this is nearly £1,000 higher than what the price cap at the same period two years ago when it was £1,138.
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: "These profits are a further sign of Britain's broken energy system.
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"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.
"There will of course be questions about how these profits were made, but the reality is that energy firms are operating on a playing field set by the Government."
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."
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."
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