Saturday, 28 July 2012

Centrica defends 23pc leap in British Gas energy profits

Centrica defended a 23pc surge in profits at its British Gas household division, insisting the jump was due to the comparison with a “weak” 2011.

Chief executive Sam Laidlaw refused to bow to demands to cut energy prices - amid analyst predictions that Centrica was likely to increase its consumer tariffs.

Operating profits in the British Gas division rose to £345m in the six months to the end of June. The rise contributed to a 15pc increase in group profits, to £1.45bn for the period.

Ann Robinson, at, said: “These soaring profits show that British Gas could and should cut its prices ahead of winter.”

Mr Laidlaw insisted the criticism was “purely because people have landed on a comparison with a prior year that was particularly weak”.
Profits had been low in the first half of 2011 due to an unusually warm winter, and gas consumption had increased again this year, Centrica said.

But gas consumption increased just 3.5pc, with the vast majority of a 21pc leap in gas supply revenues in fact due to increased prices.

Centrica said the bill rises has been needed to cover rising costs of commodities, increased social and environmental levies that it collects for the Government, and higher energy transmission costs, set by the regulator.

Mr Laidlaw said “nobody” he had spoken to felt its British Gas operating margins of 7.2pc - up from 6.9pc in 2011 - were unreasonable.

He added: “Because British Gas residential has got 16m customer accounts, the residential figure is a lot of money. But our profits equate to £3.50 a month per account before tax.”

Profits in British Gas’s business supply division slumped 27pc to £93m, as customer numbers fell. Centrica said this was due to some of the business customers going bust, and some switching supplier.

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Wednesday, 18 July 2012

Great diesel myth

Diesel cars’ reputation for saving drivers money has been shattered by research showing they are often more expensive than petrol models.

It concludes that ‘diesels are no longer the default option for frugal motoring’.

While diesel engines may deliver more miles per gallon, it can take up to 14 years before they save the average driver any money.

This is because of the higher cost of diesel cars and of the fuel, which can be almost 6p a litre more expensive than unleaded petrol.

A report today by the consumer watchdog Which? says: ‘With drivers having to pay a premium for a diesel car – typically £1,000 to £2,000 more on a new car – our tests reveal it could take up to 14 years to recoup the up-front costs in fuel savings.

‘Lower pump prices for petrol and advances in petrol-engine efficiency mean petrol cars now often provide better value for money.’

Ironically, the findings come as diesels make up more than half of the new car market for the first time.

Which? compared similar-spec petrol and diesel versions of six popular cars – the Ford Fiesta, Vauxhall Astra, Volkswagen Tiguan, VW Sharan, BMW 5 Series and Peugeot 308 SW.

It calculated the annual fuel bill for each based on an average mileage of 10,672, and concluded: ‘In four out of our six examples, the petrol engine was the best choice for a driver covering 10,000 miles a year.

The report says diesels have become more refined than in the past, but ‘with petrol now around 5.5p a litre cheaper, and some makers offering super-economical petrol engines, it’s getting harder to justify the price premium’.

It adds: ‘Not only have we moved on from the bad old days of clattery diesels, but we’ve also moved on from diesels being the default option for frugal motoring.’

In the year to May 2012 diesel cars accounted for 51 per cent of new car sales, with petrol models at 47.5 per cent. Alternative fuel cars accounted for 1.5 per cent.

full article