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The facts about profits

Newspaper headlines alleging that the large energy suppliers make “seven times more profit than they claim” are completely inaccurate.

At British Gas, our profits for each year are clearly and transparently reported, in considerable detail, for Ofgem and the City. 

We don’t “claim” or assert profits -- we have to report them as a fact.

Last year, on an average bill (£1147), we made a profit after tax of about £55, so about 5%. This graphic breaks down the various costs within a typical customer’s bill in 2015. Since those results were published we’ve reduced gas prices again – for the third time in just over a year. Those three cuts took around £100 off the average bill.

Our profit after tax has remained remarkably consistent over the last 7 years at between £42-65, or 4-6%.

Whether you take a figure before or after tax, in none of these years does the profit get anywhere near the £206 or 18.7% claimed in The Sun. The typical bill breakdown from Ofgem also matches the reality of our reported profits, and returns figures nowhere near those suggested by The Sun.

The calculations that lay behind the newspaper’s headlines on supplier profit also failed to take account of the taxes that we pay: last year, taxes accounted for £68 of the average British Gas bill of £1147.

We think it’s contentious to use industry figures to speculate forward about what profit will be during a year (2016) that’s still uncompleted. The result of such speculation is a guesstimate that’s completely wrong.

Our actual profits in 2016 will be published as part of our annual results, on 23 February 2017. On that day, we will see how wide of the mark the excited headlines have been. 

Meanwhile as we head into winter, British Gas remains focused on delivering excellent service for our customers, at a fair price.

We make sure our prices are as competitive as possible – but it’s not just about energy supply. We have 8,000 engineers keeping homes warm and working; we’re rolling out millions of smart meters to help customers get better control of their energy use; and we do more than any other energy company to help vulnerable customers.

The CMA recently concluded an exhaustive two-year investigation into the energy market. It recommended 36 remedies designed to ensure that the energy market works well for customers – a goal we fully share.


By Sarwjit Sambhi, Managing Director of UK Home, at British Gas.

 


For more information contact:

British Gas Press Office
British Gas
01784 84 3000
media@britishgas.co.uk

British Gas is Britain’s leading energy supplier, and serves around 11 million homes in Britain – nearly half the country’s homes – as well as providing energy to around half a million British businesses. British Gas provides value for money, dedicated customer service, innovative energy solutions and the highest quality Homes Services expertise in the country. Find out more at www.britishgas.co.uk.


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