Centrica profits spark call for lower fuel bills

The UK's biggest energy supplier delivered an all-time high of 595m in operating profits last year, up from 376m in 2008.

Yesterday Centrica said British Gas added 141,000 gas and electricity customers and was benefiting from operational improvements.

Wholesale gas prices have also plunged, leading to accusations that the big six providers have failed to pass on cuts quickly enough to struggling consumers.

On Wednesday Scottish Power's Spanish parent Iberdrola showed earnings up 7.9 per cent at the UK energy group, despite losing more than 100,000 customers.

Philip Cullum, deputy chief executive of Consumer Focus, said consumers should see immediate price cuts.

"Energy companies have no excuses for not cutting bills for their customers.

"It is clear the problems in the energy market are profound and that it requires fundamental reform," he said.

He added: "Energy companies have taken advantage this winter, while more than six million UK households live in fuel poverty and face a desperate struggle to keep warm."

Centrica said it realised 2009 was a "difficult year for many of our customers" but defended its pricing, saying there was always a lag between wholesale cost movements and retail bills.

British Gas was the first of the big six energy providers to cut prices last year and also led the way recently with a seven per cent reduction in gas bills.

However, the earnings figure for British Gas was far higher than most experts were expecting.

Centrica also risked further consumer anger by announcing it was increasing the full-year dividend payout to shareholders from 500m to 635m in total, boosting returns to institutional shareholders such as pension funds.

Energy Secretary Ed Miliband, MP for Doncaster North, said it was important falls in wholesale gas prices were passed on to consumers.

Despite the soaring profits at British Gas, lower wholesale gas prices had a bigger downward effect on production profits than the boost given by the residential business, leaving the wider group's earnings seven per cent lower than in 2008 at 1.86bn.