by Michael Smith (Veshengro)
Centrica, the parent company of British Gas has announced record profits for its British Gas operations of £742 million for last year with pre-tax profits for the company were £2.8 billion, with operating profits up by 29%.
Despite of those huge profits the company is taking the consumer – especially the domestic consumer – to the cleaners with one price hike after the other and now those that promised that they would keep the prices stable are doing no such thing either, including EDF.
The company was criticised for raising its prices by 7% but is still the UK's largest gas supplier and had an increase of 267,000 customers in the accounting period. Some people must have really bought in to their price promises and were those salespeople obnoxious on the phone, and I mean obnoxious.
They said their profit had been made in a difficult market with rising wholesale energy prices, with prices in the UK around 40% higher in 2011 than they were in 2010. My heart bleeds for them, like for all of those companies that rip off the customer to feed their shareholders.
The company's chairman, Sir Roger Carr, appears to be saying that the price hike of his company is being used to invest in new energy sources to meet Britain's carbon reduction targets.
He said that, if the country is to meet its climate change targets, substantial reductions in carbon intensity will be needed and that Centrica has a leading role to play here.
In a statement the chairman Sir Roger Carr said: "The UK power market is entering a period of transformation. The Government's consultation on Electricity Market Reform will lead to major changes in energy policy.
In response to Centrica's announcement the consumer organisation, Consumer Focus is calling greater clarity and transparency on energy pricing.
Its Chief Executive, Mike O'Connor CBE, that while we need successful energy companies consumers may look at the profits announced by Centrica and at recent prices rises and question how one justifies the other.
The issue is not about one company or one year's profit or loss but it is about whether the energy market is working properly and Ofgem's review must try to answer this question once and for all.
We seem to have a serious problem as to the regulator's teeth here and may be it is time that the Competition Commission be brought into the game as well to investigate whether there may not actually be price fixing going on, either in the wholesale market or at the level of the individual supply companies such as British Gas, EDF, etc.
The consumer is being taken to the cleaners, as so often, while the companies are making huge profits despite the increased wholesale price they claim to be there.
© 2011
