Newspaper article The Evening Standard (London, England)

Centrica Refuses to Cushion Gas Price Rises

Newspaper article The Evening Standard (London, England)

Centrica Refuses to Cushion Gas Price Rises

Article excerpt

Byline: ROBERT LEA

ENERGY giant Centrica will not subsidise the soaring bills its British Gas household customers are facing by taking money from the massive profits the group is making from producing and storing gas, its chief executive Sir Roy Gardner said today.

"The thought of subsidising our other activities would be absurd. It would be madness to cross-subsidise the retail business," Gardner said.

His comments came as Centrica provoked a massive row with energy consumer groups by posting pre-tax profits for 2005 of [pounds sterling]1.8 billion - less than a week after its British Gas subsidiary put household prices up by 22%, taking residential energy bills, on average, to more than [pounds sterling]1000 for the first time.

Just as galling for consumers was Centrica's decision to increase its dividend to shareholders by the same amount as the price rise - up 22% at 10.5p.

Gardner, who leaves the company in the summer to become chairman of troubled catering group Compass, said the price rises were inevitable, with the rising cost of buying gas to supply its customers sending the British Gas business into a [pounds sterling]75 million loss - reversing a [pounds sterling]165 million profit in the first half. …

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