The scandal-plagued owner of British Gas has reported record profits of £3.3 billion, boosted by rising wholesale gas prices following Russia’s invasion of Ukraine and as many British households struggle with the cost of living.
In the aftermath of the prepayment meter scandal, Centrica’s record profits are likely to enrage campaigners calling for more challenging windfall taxes, lower bills, and better treatment of vulnerable customers.
Overview
Profits for 2022 more than tripled from £948 million in 2021, thanks to soaring profits in the company’s North Sea oil and gas division. They also exceeded the company’s previous profit of £2.7 billion in 2012.
British Gas came under fire earlier this month when it was revealed that debt collectors working for the country’s largest energy supplier had ignored customers’ vulnerabilities and forced them onto prepayment meters to recover debts.
The company halted using court warrants to install prepayment meters, and the government and the United Kingdom’s energy regulator, Ofgem, later ordered all energy suppliers to do the same.
Centrica’s North Sea profits are subject to the North Sea oil and gas operators’ windfall tax. It owns 20% of Britain’s nuclear power stations, subject to the electricity generator levy implemented by chancellor Jeremy Hunt to capture windfall gains.
End Note
On the other hand, Labor has advocated expanding the oil and gas windfall tax to capture a larger share of profits.
Windfall taxation of oil and gas companies has become more prevalent in recent weeks, following record profits by oil majors such as Britain’s BP and Shell.
Labour has called for the abolition of an investment allowance that reduces taxes on oil and gas companies investments in increasing production.
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