According to a Sunday newspaper, Centrica's residential supply business British Gas is set to record severe financial losses as wholesale energy costs continue to bite.
The Mail on Sunday newspaper predicts that the British Gas operation will cost Centrica almost GBP200 million in its forthcoming financial results, putting a severe dent in the parent group’s net profits.
The newspaper adds that the losses could translate into retail customers seeing bills rise again this autumn, with speculation pointing to a 12% increase. This will inevitably put more pressure on Centrica’s valuable ‘tier one’ customer base – those who have never switched away from former state monopoly British Gas despite recent tariff rises.
However wholesale costs continue to impact upon the bottom line of most of Centrica’s rivals in any case and the parent group is in the process of trying to boost its own revenue stream by seeking further opportunities in Europe. The company recently opened an office in Dusseldorf, Germany, to help it to target I&C customers there.