Centrica Boasts £3.3 Billion Profit But British Gas Loses 39%
While thousands of homes across the UK have been struggling to pay their heating bills, British Gas owner, Centrica, raked in a whopping £3.3 billion in profit for 2022. Households across the country are furious about this energy profiteering, but some MPs have defended the right for companies to make a profit, albeit an eye-watering one in a time of the energy crisis and cost of living crisis. British Gas, however, did not do as well as 2021.
Centrica is quick to point out that it paid £1 billion in tax on its 2022 profits, most of which was paid in the UK. However, the Energy Profits Levy, the weaker windfall tax, only raised £54 million of that total sum. Labour has called for a much tougher, more useful windfall tax on the profits of these oil and gas giants to actually raise suitable funds for helping households during the energy crisis. This would also capture the sizeable profits announced by Shell and BP.
In fact, the cost of natural gas in the UK has decreased from its peak at 640.36 pence per therm in August 2022 to just 123.4 pence per therm in February. This is a fall of over 418%, but the public hasn’t been seeing the benefit of this. As gas is bought by energy suppliers in advance, the cost is fixed for a set period, causing a delay in any benefits from these price decreases. Although this costs the government a lot less in energy support, it’s not expected to lower household bills unless the decreases are sustained for longer.
British Gas has recently been in hot water after it was revealed its debt collectors had forced vulnerable customers onto prepayment meters when they hadn’t been paying their energy bills. The practice has been temporarily banned after British Gas said it was reviewing the process and looking at cases on an individual basis to see if any help could be offered instead.
10% of British Gas’ profits was set aside to help poorer customers throughout the energy crisis. As British Gas announced its own profits of £72 million for 2022, this was actually a decrease of 39% from the previous year. In this way, the company did not help Centrica make its exorbitant profits. According to Chris O’Shea, the chief executive of Centrica, the company had spent £75 million supporting British Gas households, which was more than the company took for the whole year in profits.
The majority of Centrica’s £3.3 billion profits were made from nuclear power and oil and gas. As the way these companies are set up, Centrica is unable to sell gas it produces at a discounted rate to British Gas customers. Of the profits that Centrica brought in last year, £750 million is going to shareholders, £300 million will be spent boosting a share buyback system and £1.6 million is potentially going to O’Shea as a bonus, who has been urged to turn it down. You can see the remainder of their profits in the graph below.
Angry at these profits? Take a look at the various ways in which we can help you get money back on our homepage. From making use of a uniform tax rebate to seeing if you qualify for Marriage Tax Allowance, we can help.