Consumers deserve a fair deal

IN ANY other line of work, a company doubling its profits would be admired and hailed as a great success story, but in the case of British Gas the reaction is often mixed.

Centrica revealed that its British Gas residential arm posted a surplus of £585million for the first half of the year. Given the way in which energy prices have rocketed in recent years, the tendency is to attack energy firms for fleecing customers and lining the pockets of their shareholders.

There are serious issues about how the energy sector operates and how price changes are passed through to customers, who appear to be hostages to the volatile wholesale energy market.

There are other factors regarding British Gas which have to be taken into account, however. In fairness, the company has been leading the field in the past 18 months with price cuts and attracted well over 200,000 new customers as a result. These profits also come on the back of the coldest winter for 30 years. It is hardly surprising that an energy company makes its biggest profits when the weather is at its most severe and demand at its highest. Conversely, during the summer months demand slumps. Therefore, it has to plan its yearly business activity against a backdrop of extreme fluctuation in usage. High winter usage also resulted in record boiler breakdowns, which led to a drop in profits for that side of the British Gas business.

How the firm will be judged is on how it uses those profits for the benefit of the consumer by cutting prices further or withholding any increases for the time being. People now accept that cheap energy has long gone, but they expect and deserve a fair deal.