Gas firm hits households to protect fat profits

Households faced another massive increase in gas bills today after Britain's biggest energy firm Centrica begun priming the pump for a 5 per cent rise in January.

British Gas owner Centrica blamed rising costs before a stormy AGM where shareholders were expected to demand that bosses bump up prices to make up for an expected £50 per household fall in profits.

Not that this would leave them too badly off - 2011 profits hit a whopping £2.4 billion.

The company said in an interim statement its performance was "in line with expectations" and expected double-digit profit growth from its residential customers - not least from its decision in August to increase gas bills by an eye-watering 18 per cent.

Shareholders were gathering for Centrica's annual general meeting as the Morning Star went to print, with talk of a shareholder revolt over chief executive Sam Laidlaw's £4.3 million pay packet amid a decline in profit margins.

But the energy giant is still the biggest in the business and offered shareholders a 12 per cent increase on their dividends in July, with operating profits of £1.3 billion for the six months prior.

And profit margins - based on revenues of £11.5bn - ranged between 6 and 7 per cent.

With shareholders demanding a return to pre-recession profit levels, the prospect of British Gas footing the bill seems unlikely.

But passing on the cost to its 13 million customers would tack an extra five per cent onto the average household's gas bill - further exacerbating the country's energy crisis.

The average gas bill rose by more than £100 last year, according to industry regulator Ofgem, while statutory watchdog Consumer Focus warned in December that more than five million households - one in four - were now in fuel poverty, forced to choose between heating and basic necessities.

A Child Poverty Action Group spokesman told the Morning Star "bickering" between politicians and the industry would not stop families from freezing.

Energy companies had to end their reliance on expensive imports, he said, while the government had to deal with the immediate crisis.

Uprated benefits and tax credits were the only way many families could keep their homes warm next winter, he said.

Friends of the Earth executive director Andy Atkins said customers were tired of being "held hostage" by imported gas.

The government's upcoming energy bill would have to develop clean technologies in Britain if it wanted affordable fuel in the future, he said.

While winter may be over, public attitudes to Centrica remain decidedly chilly.

Greenpeace activists blockaded the road to its Windsor complex with a mock 260-square-foot gas bill.

Half a dozen activists then entered the companies' offices, while others boarded up the doors with man-sized wooden "bills," locks and chains.