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Centrica produces around 20 per cent of the gas it supplies to its British Gas customers

Posted on 01 September 2010

Centrica produces around 20 per cent of the gas it supplies to its British Gas customers – although it aims to increase this to 35 per cent to 40 per cent – so needs to pay market rates for the rest. The UK became a net importer of gas at the end of 2004 and now relies on 15 per cent of its supplies from overseas. That is expected to rise to 50 per cent by 2010 and 85 per cent by 2020. The recent hikes represent the latest in three years of misery for households across the UK, which have seen the average gas bill leap almost 80 per cent and the average electricity bill rise more than 50 per cent. Suppliers have blamed the increases on the soaring cost of wholesale gas in the UK, which has been driven up by record oil prices, the growing reliance on imports and the lack of openness in energy markets on the Continent. Scottish Power imposed similar price rises just over two weeks ago. British Gas lost 432,000 customers in the first six months of the year, partly due to the March price hike.

Ann Robinson, director of price comparison and switching service uSwitch , said: “The public assurances given earlier in the year by British Gas following their record price rises in February have been rendered meaningless to their customers today, as they face further price misery in what has become the annus horribilis for UK households.” Earlier this week, rival EDF Energy said it would charge its customers 19 per cent more for gas and up to 9.1 per cent more for electricity from next Tuesday. “We need to run a profitable business so that we can invest in bringing more gas into the UK, which will drive down wholesale prices in the longer term.” The losses at British Gas cut Centrica’s overall pre-tax profits from £894 million to £569 million in the six months to June 30 – a fall of 36 per cent. Centrica chief executive Sam Laidlaw, who took over from Sir Roy Gardner this month, said: “Unprecedentedly high wholesale energy costs created difficult trading conditions in the first half and today’s price increase is necessary to restore margins.” But critics said the move inflicted yet more misery on the firm’s 10.7 million gas customers and 5.8 million electricity customers. “We cannot continue running the company at a loss,” said Mr Clare, who said the latest price increases should see British Gas “break even” over the full year. Their demonstrations in Kinshasa, the capital, have been broken up by riot police firing tear gas. At a rally in the eastern border town of Rutshuru last week seven demonstrators were shot dead by soldiers.Mr Kabila, who came to power in 2001 at the age of 29 after his father, Laurent, was assassinated, is the favourite. As President of the transitional government, Mr Kabila has a 14,000-strong presidential guard and total control of state media.

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