And the big winner from Ofgem’s latest price cap announcement is … British Gas. Shares in the parent company, Centrica, popped to the top of the FTSE 100 leader board for an understandable reason. While the cost of energy is indeed falling, the slice of the bill that is allocated for suppliers’ profits is going up – and increasing substantially in percentage terms. From October, we’ll all be paying, on average, £47 instead of £37 to our suppliers in the hope that fewer of them go bust.
A tenner may sound modest in the context of a price cap of £2,074 from July, but crunch the numbers to see the effect on British Gas, a company with about a fifth of an overall retail energy market of 28 million customers. An extra £10 per account equates to an additional £56m of earnings if nothing else changes – a very nice uplift from last year’s profits of £72m.
