Centrica reports 65% increase in profits

Centrica, the parent company of British Gas, has today reported a 65% increase in first-half profits to £1.56 billion. However, it is the near doubling of profits at the company's British Gas residential offshoot which has caused most concern within government and consumer circles. British Gas reported a profit of £585 million for the first six months of 2010 which is of a staggering 98% increase on the same period last year!

While the company maintains that the increase in profitability at British Gas is down to a mixture of old customers returning as well as a very cold winter, is this all? Heating and gas usage increased by 8% and while the company did actually reduce the cost of gas in the UK there was a major surge in demand. This comes at a time when the UK utility sector is coming under more and more pressure from the government and consumers with the general trend in energy prices still moving higher.

A near doubling of profits at the residential arm at a time when the UK economy is still struggling and many consumers are on the edge of the financial abyss is not exactly what we want to hear. This comes hot on the heels of yesterday's announcement by the government which suggests that businesses in the UK will carry the can for future investment in alternative energy sources and the commitment to reduce the UK's emissions.