British energy company Centrica under pressure to justify natural gas price hike after reporting rise in profitWednesday 27 February 2013 18.14
Centrica posted a 9% rise in profit at its British Gas business, the country's biggest household energy supplier, putting pressure on it to justify an inflation-beating rise in prices in the midst of a recession.
All of Britain's big six energy suppliers raised tariffs this winter, prompting a public outcry and leading the government to promise action to ensure consumers get the best deal.
Centrica, which reported a 5% increase in group earnings for last year, said the price rises were needed to cover energy costs, investment and to secure supplies.
"We recognise that it is very difficult," Chief Executive Sam Laidlaw told the BBC's Today radio programme when grilled about a 6% rise in prices for consumers.
But he said the firm had entered into £50 billion worth of commitments to secure supplies and "you cannot do that unless you remain a successful company."
The government's latest energy poll showed Britons are increasingly worried about energy bills, with 12% saying energy costs were a greater concern than transport or food expenses.
This has prompted Prime Minister David Cameron to step into the debate about consumer bills by promising to force suppliers to put customers on their cheapest tariffs in October.
Gas and electricity companies are now ranked lower than banks in terms of trust, and on a par with car dealers, according to consumer watchdog Which, leading regulator Ofgem to unveil plans last week for tougher rules to deal with the public's mistrust of energy suppliers.
Centrica said British Gas's profits rose 9% to £1.09 billion, just above analysts' average forecast of £1.07 billion and helped by an 11% increase at the unit's residential energy supply business.
Cold weather pushed up gas consumption by 12%.