Friday 11 May 2012

Centrica hints at price rises on the way

Centrica hints at price rises on the way

Centrica today strongly hinted a gas price rise could be on the way.

In the interim statement the British Gas owner said the cost of supplying gas is likely to go up £50 per household and this could have a knock-on effect on prices.

In the statement it said: “UK wholesale gas costs are around 15% higher for next winter than last, and non-commodity costs - which are also largely outside of our control – are expected to add a further £50 to the cost of supplying the average household this year. The trend for retail energy costs therefore remains upwards.”

A spokesperson for Centrica told ELN the firm never comments on possible future price movements, adding: “What we’re talking about here is the cost of doing business, increasing wholesale oil and gas prices, transport and distribution levies plus government mandated environmental and social levies over which we have no control.”

The hint about price rises comes despite Centrica declaring it is on track to deliver “double digit profit growth” in residential services such as boiler repair and central heating.

Centrica’s spokesperson said it would not be able to use this profit to counter price rises because this sort of “cross-subsidisation” is not legal.

He said: “In a competitive market, you can’t cross subsidise from one part of the business to another because this would give an unfair advantage over your competitors.”

Written by

Bruna Pinhoni

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