British Gas faces the wrath of millions as it reveals 11% surge in profits just months after hiking customers' bills by £80

British Gas is today facing the wrath of millions as it revealed a massive surge in profits just three months after hiking customers’ bills by a further £80.
Profits for 2012 soared by 11 per cent on the previous year to £606million.
It is also expected to warn of another punishing energy price hike for its 12million customers as early as next winter.

How it all adds up: British Gas has broken down the average gas and electricity bill into the individual costs (Source: British Gas)

Meanwhile the bosses of British Gas’s owner Centrica will collect a shares bonanza predicted to top £10million.
The bumper profits come during a winter in which seven in ten households have gone without heating at some point to keep costs down, according to uSwitch.com.

 

Over a third of people told the comparison service that cutting back on energy is affecting their quality of life or health.

Big pay day: According to Centrica's accounts, its chief executive Sam Laidlaw will gain a huge sum after the group's bumper profits

Centrica reported an even higher profits rise, with a 15 per cent gain to roughly £2.8billion.
Company chiefs will be given millions of shares under a long-term bonus scheme set up three years ago, which is linked to the firm’s performance.
Bosses will benefit from the fact that they will not receive the shares until after the end of the current tax year.
As a result, they will cash in on Chancellor George Osborne’s cut in the top rate of tax from 50 per cent to 45 per cent.
The UK’s biggest energy supplier put up tariffs by six per cent in the teeth of the winter chill, pushing up bills by £80 to an average £1,350 a year.
Richard Lloyd, executive director at consumer champion, Which?, said: ‘People are bound to question whether they’re paying a fair price for energy when they see big profits announcements.
'Centrica’s analysis won’t change that view as record-high bills land on millions of doormats.'

Another price increase: British Gas is today expected to warn of another punishing energy price hike despite a massive surge in profits

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1. Take regular meter readings rather than relying on an estimate. This keeps you as close as possible to an accurate bill
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5. Knowing how much you pay now or how much energy you use delivers the best comparison. Get your most recent bill and use the figures.

Centrica said the sharp profit increase at British Gas residential came after last year's colder-than-normal weather saw gas use leap 12 per cent, despite a fall in customer accounts.
It said the number of residential customers dropped one per cent in the year to 15.7million, compared to 15.9million in 2011.
British Gas published a breakdown of the average customer bill, in an attempt to diffuse the furore over price hikes.
It said of the average customer bill of £1,188 a year, the wholesale energy cost made accounted for £568, £283 went to delivery to the home, environmental and social policies added £112 and tax made up £72. Operating costs totalled £104, leaving it with £49 in profit per household.
Directors from the company appeared on television this morning to defend the results.
'I completely understand our profits announced today will create a reaction with customers,' managing director of services and commercial at Centrica Chris Jansen told Daybreak.
'I think it’s important to remember that in 2011 it was a very, very mild winter ... so the country used a lot less gas, and actually our profits in 2011 were 20 per cent down on 2010.'
Asked whether customers would face further price increases, Mr Jansen replied: 'It’s impossible for me to say that, that’s like looking at a crystal ball.

 

'The general trend for energy prices are prices are increasing. All we say to customers is let’s do what we can to control energy bills.'Prices might be going up but bills don’t need to if we control our energy use.'
Ian Peters, managing director of residential energy for British Gas, told the BBC: 'If I look into the future we have no plans to put prices up even higher, the gas prices are relatively calm.'
Asked on BBC Breakfast how long into the future - and if the firm was committing to not putting prices up - he said: 'I can’t do that because the gas market is volatile.
'But right now, as I say, it is very early in the year, we work in a very competitive market and it is not in our interest or our customers’ to put prices up. So we will do everything we can not to do that.
'What I want to say is that we will move heaven and earth to keep our customers’ bills down. We have the lowest bills in the industry.'
Alastair Buchanan, head of energy regulator Ofgem, has warned of an energy crisis as Britain becomes more reliant on expensive imported gas.
He warned last week that the National Grid could struggle to meet demand between 2015 and 2020 after the planned closure of coal and oil-fired power stations next month to meet environmental targets. As a result customers could have to pay, he said.
Price rises will also go to subsidies for wind farms, nuclear power stations and free insulation for the vulnerable.
According to Centrica’s accounts, its chief executive Sam Laidlaw, finance chief Nick Luff, head of energy Mark Hanafin and the head of its US arm, Chris Weston, will gain from the shares bonanza.
Another beneficiary is the departing managing director of British Gas, Phil Bentley. His total departure package could be worth £10million. His departure was confirmed today.
Company sources said the shares are part of a long-term incentive, not a windfall, while the date of the hand-over was decided long before the 50 per cent tax rate was scrapped.
Centrica has tried to pre-empt a furore over pay with a study on its positive impact.
Mr Laidlaw said: ‘At a time of uncertain economic prospects, our activities across the UK are even more important to secure employment, put the supply chain to work and contribute our fair share of tax.’
The company employs some 33,000 people in the country, while its tax bill is expected to be around £1.1billion in 2012. Unlike many rivals, it is wholly British and pays its tax here.