Energy bills are set to fall as British Gas Residential posts a 58% jump in profits – boosting its annual profits form £376 million to £595 million.
As the residential arm of British Gas reports a 57% increase in profits, there are suggestions from indutry experts that home gas and electricity prices may fall in the near future.
British Gas is benefitting from lower wholesale energy prices, however as its profit show, the company has been widening its profit margins by not passing the full benefit of lower energy costs to its customers.
The supplier did recently cut the cost of its standard tariff by 7% and also launched its WebSaver 6 tariff which will help consumers save money on their energy bills. Dual Fuel customers have seen their annual costs fall by 13% which amounts to £170 savings over a year.
However the average household bill for a British Gas dual fuel customer is still £1,158 per annum which is 27% higher than in January 2008.
Industry insiders such as uSwitch are urging suppliers to pass on a greater proportion of the lower wholesale energy costs, particularly as many consumers are struggling to meet their fuel costs after such a cold winter.
As Ann Robinson, Director of Consumer Policy at uSwitch.com, says: “There is now clear evidence that energy suppliers are benefitting from lower wholesale prices. With Britain’s biggest supplier reporting a 58% increase in residential profits in the same week that Ofgem, the industry regulator, reported an estimated £30 increase in suppliers’ margins, the weight of evidence in favour of further price cuts is stacking up.”
“British Gas has now cut its prices for the third time in 12 months and the fact remains that it is still the only supplier to have reduced prices this year. Whether customers think that is enough of a peace offering remains to be seen, but it’s time for the spotlight to be turned on the remaining five suppliers who are yet to say a word.”