Centrica has reported a profit - It’s infographic time
- 27 Feb 2013, 17:00
- Ros Donald
Roll out the infographics: energy company Centrica
has announced its retail arm British Gas's profits are up 11 per
cent. With most people blaming rising bills on energy company
profits, it's not surprising Centrica is careful to point out only
a small part of consumer bills goes straight to the company. But
what about the rest? Here's our roundup of today's attempts to
explain how it all works.
According to Centrica, British Gas's 2012 profits
rose to £606 million after a cold winter pushed gas use up by 12
per cent. The
profits report isn't likely to go down
well with consumers after the company put up gas and electricity
tariffs by six per cent at the end of last year.
British gas breakdown
Centrica is presumably sensitive to the fact that
energy companies aren't flavour of the month at the moment. So it
has produced a breakdown of British Gas's average consumer bill to
head off criticism of its profit announcement, saying that out of
its average annual dual fuel bill of £1,188 it takes a profit of
£49 per customer. Centrica also says it contributed over £1
billion in taxes last year and invested £2 billion.
We've made a chart using the figures British Gas
gave, to show what this looks like.
And here's British Gas's version, comparing this
year's profits to last year's.
Energy companies are not popular at the best of times
polling by the Sunday Times last year
revealed most people blame energy company profits over wholesale
prices or for rising domestic energy bills. But are they right?
Let's look at how British Gas's breakdown compare to the national
TheBBC has today produced an infographic based
on an Ofgem
factsheet, which came out last month,
giving a breakdown of average consumer payments contained in energy
bills. Unlike British Gas, the BBC has split up environmental
costs, such as payments to support renewable power and energy
efficiency, from payments for social programmes such as pensioners'
When it comes to profits, Ofgem's figures differ from
British Gas's - while Ofgem says nine per cent of customers' dual
fuel bills go to energy company profits, British Gas says profits
account for around four per cent of its customers' bills.
The BBC also produced a graph showing how the
wholesale cost of gas and combined gas and electricity work to push
up consumer bills over time. Go to the BBC page to appreciate the full glory of this
one - it's got a cool slider function.
Looking at the wholesale gas price doesn't give the
full picture for Centrica, however. It buys wholesale gas and
electricity, but it sells it too. That means that whether wholesale
prices are up or down, Centrica's profits as a whole can go up, as
Channel 4 blog points out. Centrica
Energy's total 2012 profit was £2.7 billion, up 14 per cent on last
Gas is the most expensive fuel around, as the graphic
Sky News shows. It takes a bit of
explaining - it shows how energy prices have changed using the fuel
component of the
retail prices index - which the
Department of Energy and Climate Change (DECC) publishes. This is a
measure of inflation which shows the change in the cost of a group
of goods and services.
It shows the price that consumers pay for gas went up
by 9.5 per cent between April-June 2011 and the same period last
What about the other companies?
British Gas has defended putting up its consumer
tariffs while its profits were going up, saying it increased prices
by less than its competitors. Enter the BBC with another infographic to show when
companies put up prices over the past two years, and by how
We can also see how different companies' profits
Consumer Focus tracks how much money
(shown on the vertical axis) companies take before tax year on
year. According to these calculations, Centrica is the most
profitable of the Big Six - making £2.1 billion in 2011 probably
because it has more
favourable contracts with
suppliers. It's very difficult to know exactly how much
Centrica pays for gas, though. Energy companies buy much of
their energy in advance on terms that are rarely revealed.
Interestingly, even though EDF has been one of the
more profitable companies over the last few years - making £1.6
billion in 2011, - it also announced the biggest price rise
for consumers. EDF gas and electricity bills went up by 10.8 per
cent in December last year.
While consumer energy bills continue to rise, it's
pretty certain the profit reports of Centrica's competitors will
also attract their fair share of attention. But it remains to be
seen whether the relationship between energy company profits and
consumer bills will become any clearer.