Fury over record £3bn profits at British Gas

British gas owner Centrica posted record annual profits of around £3 billion this week.

The massive profit march, which follows a spat over debt collection agencies breaking into the homes of difficult customers to forcibly install prepayment meters, will spark another round of profiteering allegations from energy companies.

The stunning 2022 earnings figure will be released when the company unveils its full-year results on Thursday. Millions of British Gas customers, along with those of other suppliers, are struggling to pay their energy bills as prices have skyrocketed due to the war in Ukraine.

Chief executive Chris O’Shea is likely to issue another apology for the collection agencies storming into people’s homes when he presents the results. He has already publicly apologized. O’Shea is likely to face pressure to scale back a potential multi-million pound reward and incentive package. He is eligible for a salary and bonus bonanza of up to £4.26 million linked to Centrica’s performance.

The gas chef, who lives in a £1.5 million home in Reading, last year gave up a bonus of more than £1 million for 2021 due to the ‘hardships faced by our customers’. However, the company’s remuneration committee said at the time that if he was entitled to a 2022 bonus, they planned to hand it out, saying it is “unsustainable” for him to continue to sacrifice rewards.

In 2021, Centrica made a profit of £761 million. It has already revealed that it made £1.34 billion in the first half of 2022. Other energy companies, including Shell and BP, have reported great results so far this year. Centrica, which still has a large number of small shareholders, will also increase its dividend and launch a new share buyback – just three months after the £250 million bonanza announced in November.

But the earnings numbers will inevitably create a storm as many families struggle to pay their energy bills amid a cost-of-living crisis that has engulfed the UK.

Tory MP Alexander Stafford, who is a member of the Commons’ Business, Energy and Industrial Strategy Committee, said: ‘It is absolutely disgraceful that Centrica is making huge profits by raiding people’s homes and pushing people into further poverty. ‘

Centrica is the largest electricity and gas supplier to UK households, serving over ten million customers.

It has benefited from rising energy prices following the Russian invasion of Ukraine, which led to accusations of profiteering.

The company has delivered particularly strong performances from its production and energy trading activities in the North Sea, as well as its 20 per cent ownership of Britain’s five nuclear power stations.

It is now poised to pour a whopping £1bn into the treasury. That’s more than oil giant Shell revealed last week that it will pay just £110m in UK windfall tax for 2022. But it is less than BP will pay £1.8bn. Centrica has been hit by two windfall taxes in the past year as ministers attempted to tax “excess profits” generated by oil and gas producers, as well as low-carbon electricity generators.

Serious questions remain about the future of Centrica’s Rough storage facility off the Yorkshire coast, which partially reopened in October after major engineering upgrades over the summer. The move was a big boost for the UK this winter, but the site is still running at just a fifth of its previous capacity. As a result, Britain could leave itself vulnerable to gas shortages and high energy prices next winter as the government and Centrica failed to agree on the expansion of the Rough facility.

The Mail on Sunday has learned that the site requires a £1 billion investment. Centrica had been willing to cough up £500 million and hoped the government would make up the other half.

However, talks between the government and Centrica over the new funding have failed in recent weeks, and Centrica has warned it will not be able to expand capacity in time for next winter.

Sources said the discussions had become increasingly heated and acrimonious, adding that the government had walked out.

End Fuel Poverty coordinator Simon Francis said the profit margin was “obscene.”

Friends of the Earth climate activist Jamie Peters said people would be “outraged” by the gains. “Government intervention is needed to fix an energy system that seems to benefit only a few,” he said.