In a time where many UK households are heavily struggling with paying their energy bills, Centrica, the largest supplier of gas in the UK have announced their profits to increase by almost 500% from £262 million to £1.34 billion. Centrica´s adjusted earnings before interest and taxes(EBITDA) for the first half year of 2022 rose to £1.6 billion compared to £682 million for the entire year 2021. The company in an announcement has stated that it is aware of the tough times that are at head for their customers and that they will try everything in their power to support customers. Centrica welcomed around 150,000 new customers that came over from other suppliers that ceased trading in the past year.
Published on: 28-07-2022

Households keep seeing their bills rising

Energy prices in the UK continue to be on the rise following the energy crisis and the war in Ukraine. The energy price cap, the maximum yearly rate that energy suppliers can charge their customers has sharply increased in the last year. As you can see from the table below, the price cap had been quite stable for 2.5 years to then rise by 53% from £1,271 to £1,977 in April 2022. In June 2022, analysts predicted that the October 2022 price cap would lie around £2,900, another massive increase. However, consultancy group BFY in more recent calculations estimated the price cap to rise even further to £3,420 in October and potentially £3,850 in April 2023.


Development Average Energy Cap over time
Date Energy Price Cap Amount
January 2019 £1,137
April 2019 £1,254
October 2019 £1,179
April 2020 £1,146
October 2020 £1,042
April 2021 £1,138
October 2021 £1,277
April 2022 £1,971

* Based on 2,900.00 kWh of ⚡ and 12,000.00 kWh of 🔥 per year on average



 

These are undeniably heavy times for UK households, if the price cap increases like predicted, not only would it mean that the energy prices would have tripled in 2 years, but also would it make half of the UK population fall into fuel poverty. The message that energy suppliers see their profit skyrocket could therefore not come at a worse moment.

Not only Centrica sees record profits this year.

Centrica, the company that owns British Gas is not the only company to have reported stellar profit numbers. Shell, another large supplier in the UK has reported record profit numbers for the year. Their profits for the 2nd quarter of the year amounted to £9.4 billion compared to £4.5 billion over the same period last year. A more than 100% increase in total profit. Several foreign firms in for example the US and Spain also recorded very bright financial results adding to the dissatisfaction of households across Europe and the rest of the world.

The large profits for energy companies have reignited discussion of heavier taxation for oil and gas profits to give the money back to people who really need it to pay for their bills. Other voices suggest reinvesting the extra tax on oil and gas profits into home insulation to improve energy efficiency in UK households and via that way allow them to save on their energy bills. Energy companies have vowed their continuous support for vulnerable households to pay their bills but how much of those promises will be kept remains to be seen.