News that British Gas profits have soared by nearly 900 per cent has sparked outrage among consumers.
The UK’s biggest energy supplier added an extra £500 million to its first-half results after Ofcom allowed companies to charge their customers a little extra in order to recoup money they lost during the energy crisis and the pandemic.
The price cap on energy bills has meant that British Gas has struggled to make any real profits in recent years.
This came to a head when wholesale energy prices started to rocket in 2021 and 2022, when the price customers paid British Gas for their electricity was capped by Ofgem, but the price that British Gas paid to its suppliers was not.
This meant that the company, and many other suppliers, was paying more for the energy it bought than what it sold, leading to massive additional costs.
The companies took these hits, but Ofgem – fearing that weak suppliers might struggle or even collapse – allowed them to later recoup these costs by adding around £100 on the price cap.
Because of the Energy Price Guarantee, which ensured that the average household bill would be £2,500 per year, this extra money would have been paid to suppliers from the Government.
Without this Government support households would have paid that money instead.
For British Gas this added up to around £500 million in total in the first six months of the year.
A number of people on social media have been outspoken about their dismay at the scale of the profit making.
Labour MP Zarah Sultana called for energy to be brought into public ownership, while Prem Sikka called it “legalised robbery”.
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