Centrica has reported a profit – Its infographic time
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.
Image - Screen Shot 2013-02-27 At 15.58.38 (note)
And here’s British Gas’s version, comparing this year’s profits to last year’s.
Image - Article -2285215-18522F7B000005DC-966_634x 747 (note)
Wholesale gas
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 average.
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’ fuel allowances.
Image - Png ;base 64235cf 65c 223cc 5d7 (note)
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.
Image - Screen Shot 2013-02-27 At 13.27.03 (note)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 this Channel 4 blog points out. Centrica Energy’s total 2012 profit was £2.7 billion, up 14 per cent on last year.
Gas is the most expensive fuel around, as the graphic below by 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 year.
Image - Screen Shot 2013-02-27 At 14.51.58 (note)
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 much.
We can also see how different companies’ profits differ. 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.
Image - Screen Shot 2013-02-27 At 15.21.46 (note)
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.