British Gas to raise prices as profits slump

Millions of homeowners face a second rise in the gas and electricity bills this year as British Gas owner Centrica grapples with a slump in its profits.

British Gas customers were dealt a 15 per cent rise in their energy bills in January as the company struggled to deal with the near doubling in the cost of buying gas in the wholesale markets.

That price rise did not go far enough for Centrica however as a trading update revealed that as the continued rise in wholesale gas prices "has caused profit margins in British Gas in the first half of the year to be squeezed to levels below our long run expectations."

British Gas has lost 100,000 customers since the January price rises, leaving total customer base at 15.9 million the company reported today. The group had 17.7 million British Gas customers at the start of 2005.

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