Industry experts are urging British Gas to drop its prices, after the energy company recorded huge upstream profits.
British Gasís upstream profits ñ the profits driven by the provision of gas and power at the wholesale end of the company ñ are up by 33%.
The wholesale profits have risen from £771 million to £1,034 million, but British Gas has also reported a decrease in residential profits.
The energy company reported a year-year decrease in residential profits of 30%, down from £742 million to £522 million.
ìThe important thing here is that the drop in residential profits is more than offset by an increase in profits at the wholesale end of the business,î said Ann Robinson, Director of Consumer Policy at uSwitch.
British Gas has blamed the drop in profits on the mild winter weather, which it says has caused people to switch off or lower their heating.
But research from uSwitch found that the reason the majority of people reduced their energy usage was the high cost of bills.
British Gas has raised its prices twice in the past two years ñ in December 2010 and August 2011. This has pushed the average energy bill up to £1,286 per year.
It was found that British Gas energy bills have risen steeply in the last eight years. In 2004, the average energy bill was £543 per year ñ less than half of todayís average.
ìI suspect that many of its customers will be even more disappointed that while their bills soared by £256 or 24.9% as a result of two price hikes, the supplier has subsequently cut just its electricity price by £26 or 5%,î said Ms Robinson.
ìEnergy companies are now enjoying lower wholesale prices which will be helping their bottom lines ñ they should now consider passing this benefit on to their customers at the earliest possible opportunity.î
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