Wednesday, 27 February 2013


News that British Gas profits have risen because a colder 2012 meant people used more gas won’t surprise many people, let alone British Gas customers. British Gas revealed that profits from the residential energy of £606 million pounds for 2012, up 11% from the previous year, gas consumption had been up 12%. Profits are up 16% to £312 million pounds at its residential services unit, which covers services such as repairing boilers. Centrica, British Gas’s parent company, has reported an adjusted operating profit of £2.7 billion for 2012, up 14% from 2011.

Lest we forget, this winter British Gas raised its gas and electricity prices by 6% in November 2012, as did all of the other big six energy cartel members. Ofgem (Energy regulator) provided details of the plan last week, which will also limit the number of tariffs that suppliers can offer and force them to make bills clearer. The energy cartel’s excessive winter profit taking even provoked the Prime Minister David Cameron to step in and state that he was going to force them to put customers on their cheapest tariffs.

While this was nice, but it was more about being seen to look good as the Conservative pre-election pledge for an independent inquiry into the £25 billion-a-year energy industry long subject to lengthy and repeated criticisms about accusations of profiteering on electricity and gas was quietly dropped in August 2010.  The Conservatives have moved on from October 2009 when then Tory Energy Spokesman, Greg Clark (now Financial Secretary to the Treasury) said that the "cartel" of the big 6 energy firms would be referred to the Competition Commission by an incoming Conservative Government.

An 'independent' investigation into the Energy companies refusal to pass on reductions in wholesale energy prices to customers would have been nice as would the promised 'Energy Revolution' to overhaul the energy sector billing structure and charges. Then Tory Energy Spokesperson condemned the unacceptable lag between the cost of wholesale gas prices and household energy bills - noting that customers were on average being charged some £74 pound too much for their energy per year.

Oddly enough wholesale prices for domestic gas are currently lower than they were five years ago. At the moment it’s all about our pounds being in their pocket and maximising the cartel’s profits which coincidently boosts the Treasury’s tax revenues. Few of us this winter had as snug and toasty a relationship with the energy companies as that which exists between the political parties within the Westminster village (and without) and the energy supply companies.

Before the last Westminster general election, the Conservatives and the Liberal Democrats made repeated criticisms (and much political capital) from New Labour for its failure to tackle prices charged by the Big Six suppliers and repeatedly demanded an inquiry by the Competition Commission. Now the party formerly known as New Labour is busy trying to make political capital from the Con Dem’s failure to failure to tackle prices charged by the Big Six suppliers, something they conspicuously failed to do in the thirteen years they spent in office.


  1. And wholesale prices are only part of the picture, other costs have risen sharply, the post tax profit as a percentage is about 5%, abolish that profit and you will see a tiny change to the customer's bills.

  2. The situation is made worse by the fact that successive Westminster governments have been pretty indifferent to the consequences of an unregulated energy market. The big 6 are running wild making hay while the sun shines, entirely aware that no Westminster government will regulate and the fact that Ofgem is largely a waste of time. Some of the Westminster village elite (and I emphasize some here) are pretty well insulate from the dilemmas that ordinary people are facing. especially when it comes to heat or eat!

  3. so if we abolish the profit people's bills will fall by about 5% - which is hardly anything - so what do you suggest we do? I would say that the issue is not the cost to consumer but the low wages of people.