British Gas pledge to keep prices down as cold snap boosts profits

Householders boosted profits for British Gas owner Centrica at the start of the year as consumption increased by nearly a fifth compared with 2012 during the prolonged cold snap.

But the energy giant, which raised prices by 6% in December just before the harsh weather set in, said that instead of pocketing the extra earnings it would use them to prevent any further price increases "for as long as possible".

In a trading update ahead of its annual general meeting today, Centrica said its British Gas residential business was on course to deliver full-year profits in line with expectations of £602 million - slightly down on last year due to higher costs.

It said: "Against a background of sustained cold weather and periods of higher commodity prices, Centrica has performed well in the year to date."

The company said UK customers had increased by 28,000 over the first four months of the year due to "a competitive pricing position and continued good levels of customer service", and revealed the major impact of freezing conditions on its revenues at the start of 2013.

"As a result of the unusual period of extended cold weather, average residential gas consumption was 18% higher in the first four months of 2013 than in the same period in 2012, and average residential electricity consumption was 3% higher," it said.

"Recognising the economic pressures facing many of our customers, the board has determined that any benefit arising from the exceptionally cold weather will be used to maintain our price competitiveness.

"As a result of this decision, we expect the residential energy supply business to deliver an operating profit for the full year in line with expectations, weighted towards the first half."

A spokesman said: "We will use that to effectively hold prices for as long as possible."

Earlier this year, Centrica was criticised as "insensitive beyond belief" as it announced five bosses received £16.4 million in remuneration at a time of soaring bills for UK households.

Chief executive Sam Laidlaw received almost £5 million, with a basic salary of £950,000 topped up with bonuses and long-term share awards.