British Gas profits soar as freezing winter kept Brits reaching for the thermostat

British Gas amassed thumping profits in the first three months of the year as the nation froze during the coldest winter for a generation.

The plunging temperatures forced the company's 15.9million customers to turn up the central heating and meant they used an average of 7 per cent more gas than a year ago.

That increase came against a background of a sharp fall in wholesale prices, resulting in a profits windfall for the UK's biggest energy supplier.

British Gas cut its gas price in February but the scale of the reduction did not match the lower wholesale price of gas.

The net result is that while its customers ended up with slightly lower bills for the three months compared with a year ago, the company's profits soared.

British Gas is owned by Centrica which published its latest trading statement to the City yesterday.

It did not put a specific figure on the profits for the three months, however they are thought likely to drive the total for the full year to a record high.

Profits at British Gas rose a staggering 58 per cent last year to £595million and are expected to climb yet higher this year.

All the 'big six' energy suppliers have been accused of profiteering over the winter months.

Consumer groups, charities and politicians said they had plenty of scope to cut prices before the coldest winter in 30 years.

British Gas insists its decision to delay its price cuts until February, when gas tariffs were reduced by 7 per cent, was a fair approach.

The reduction meant the average bill paid by its customers for January through to the end of March was £373, which was some £8 less than the same period last year.

Another factor in the reduction was that many people have taken steps to insulate their home to avoid the need to keep the central heating burning.

British Gas’ managing director, Phil Bentley, said: 'We are absolutely focused on helping our customers use less energy and cut their fuel bills.

'Despite the increased gas use during the severe cold snap, we are succeeding in making overall reductions in the use of gas and electricity, against the reported trend in the UK.'

British Gas' rivals - Scottish & Southern Energy, nPower, E.on, EDF and Scottish Power - delayed their tariff reductions until March, when the worst of the freeze was over.

The line taken by British Gas meant it has signed up 200,000 new residential customers so far this year, as well as 100,000 servicing contracts.

The group installed 20per cent more central heating systems than a year earlier - thanks to cheaper pricing and the Government's boiler scrappage scheme.

The cold weather also boosted profits at its business energy supply arm due to higher than expected demand.

The healthy profits from the group's energy supply arm were however offset by much tougher conditions for Centrica's upstream oil and North Sea gas production.

While gas and oil production was 59per cent ahead of the previous year - helped by acquisitions - wholesale gas prices were low due to a market glut and weak demand.

The company said it expected the lower wholesale gas prices to continue this year.

Centrica said: 'Overall the outlook for group earnings for the full year remains positive, subject to the usual variables of commodity price movements and weather patterns.'

Shares in group, which have outperformed other major British utility companies by 4per cent since the start of the year, were up by another 4.4per cent in early trading.