British Gas owner Centrica sees profits triple to £3.3 billion as energy prices soar

British Gas owner Centrica has reported record profits of £3.3 billion last year as millions of households across the UK struggled to afford to heat their homes.

The profit is triple the £948 million the energy company made in 2021, and surpasses the previous highest ever yearly profit of £2.7 billion in 2012.

Stripping out its Spirit Energy businesses that were sold, underlying earnings for the group jumped to £2.8 billion from £392 million the previous year.

The record profits have been helped by rocketing energy prices, as oil and wholesale gas costs have soared to new highs in the wake of Russia’s invasion of Ukraine. The high energy prices have sparked a cost of living crisis in the UK.

Centrica’s results showed it made operating profits of £72 million at its British Gas retail division, British Gas Energy, but this was down 39% on the year before.

The earnings haul for last year comes as anger grows over a run of massive profits notched up in the sector and mounting calls for greater windfall taxes.

Shell profits soared to £32.2 billion ($39.9 billion) last year, while BP profits hit a record $27.7 billion (£2 3billion).

Centrica said it made operating profits of £72 million at its British Gas retail division, British Gas Energy, but this was down 39% on the year before.

The figures come after British Gas was criticised over its use of debt collectors to force-fit prepayment meters in the homes of vulnerable cash-strapped customers. The scandal sparked an urgent inquiry by regulator Ofgem and has seen Centrica banned from force-fitting pre-payment meters.

Centrica said it was “extremely disappointed” by the pre-payment meter allegations over the tactics used by the debt collectors it employed, adding: “We immediately took action to address this and are completing a thorough independent investigation.”

Unite union general secretary Sharon Graham said: “British Gas owner Centrica has been coining it in from our massive energy bills while sending bailiffs to prey on vulnerable consumers the length and breadth of the country. These energy companies are showing us everything that is wrong with the UK’s broken economy.

“Rishi Sunak should get a grip – pull the plug on rampaging energy profiteering, impose a meaningful, tough windfall tax and give the NHS a pay rise with the proceeds.”

Centrica said it paid nearly £1 billion in tax relating to 2022 profits, but it also revealed it handed out bumper returns to shareholders, with plans to boost its share buyback programme by another £300 million and paying out a full-year dividend of 3p a share.

Shadow climate secretary Ed Miliband hit out at the government as he promised that Labour would introduce a “proper” windfall tax on energy companies. In a tweet, he wrote: “It cannot be right that, as oil and gas giants rake in the windfalls of war, Rishi Sunak’s Conservatives refuse to implement a proper windfall tax that would make them pay their fair share. Labour would use a real windfall tax to stop the energy price cap going up in April.”

Meanwhile, the UK’s leading progressive thinktank IPPR said Centrica’s profits are “undeserved”. Dr George Dibb, head of the Centre for Economic Justice at IPPR, said: “These scandalous profits are undeserved and come directly from the pocket of bill-payers.

“We all know that wholesale energy prices have been sky-high for the past year, but that’s no reason that gas suppliers should be making higher profits on the back of higher bills. These profits, which are then being transferred directly to shareholders via buybacks and dividends, are a direct transfer away from bill-payers during a cost of living crisis. It is time to introduce a tax on share buybacks and use those revenues to support public services.”