Centrica, the company that owns British Gas, have today revealed that they made huge profits in 2022 despite millions of people in the United Kingdom paying inflated prices for gas and electricity.
In 2022, Cenrinica made obscene profits of £3.3bn. This is more than three times what they made in 2021 where the company made £948m. It is the first time since 2018 that the company have made profits in the billions and over half a billion more than their previous record-high of £2.7bn in 2012.
The news has been met with more calls for further tax measures being placed on energy companies after Shell also announced record profits in 2022 recently. The energy giant made a whopping £32bn last year, the largest amount in the company’s 115-year history.
British Gas has come under fire in the past year after they forced vulnerable customers to have prepayment meters fitted into their homes. Now that we know they were doing this while bringing in billions of pounds of profit, the criticism is likely to amplify.
With Centrica releasing figures that show record profits, many will assume that British Gas are also raking it in. However, the reality is that their financial performance alone is far from the levels of their parent company.
Figures relating to British Gas show that adjusted operating profit has decreased by nearly £50m over the past couple of years. In 2021, the gas company made around £118m in profits, while last year that figure was around £72m.
Interestingly, though, they had more residential customers in 2022 than in 2021. They jumped from 7.1m to 7.5 customers across the two years, making a decrease in profit slightly concerning from their perspective.
UK residents have been paying soaring energy bills for the past year after wholesale gas costs rose due to the Russian invasion of Ukraine. However, with energy companies now making profits there will be further pressure to increase the taxes they are subject to.
Last year, Centrica paid £1bn in tax, with £54m of that coming from the Energy Profity Levy which was introduced by the government last year in response to the energy crisis. Centrica were also subject to the 45% windfall tax that was placed on electricity generators.
With British Gas’ profits down on 2021, the majority of Centrica’s earnings came as a result of its nuclear, oil and gas business. The company also sold Spirt Energy, an oil and gas business, in May 2022 which also contributed.
Calls for harsher measures
Centrica is the latest energy company to announce record profits and, as a result, calls for the government to place stricter taxes on these companies are getting louder. Unite, the largest trade union in the United Kingdom, has released the following statement written by their General Secretary, Sharon Graham, in light of the news:
“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.”
The Labour Party have also been quick to pile the pressure on Sunak and his party. They have called on them to impose tougher sanctions on profiteering energy companies. The Shadow Climate and Net Zero Secretary, Ed Miliband said:
“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.”
Over the past six months, a record number of workers have taken strike action in the United Kingdom from nurses and ambulance workers to teachers and rail workers. All of them have been told that they aren’t entitled to a fair pay rise amid a cost of living crisis driven by soaring energy costs.
The news, then, that energy companies made billions of pounds last year is another kick in the teeth to them and the service they provide the country. The government are seemingly going to be backed into a corner and their only way out will be to raise the windfall tax on energy companies.