British Gas has said energy supplies to its 8 million customers are guaranteed, despite Russia’s invasion of Ukraine, but declined to comment on what soaring prices might mean for household bills.
Russia, which launched a full invasion of Ukraine on Thursday, is responsible for a third of Europe’s natural gas and about 10% of global oil production.
About a third of Russian gas supplies to Europe usually travels through pipelines crossing Ukraine, and there are fears retaliation against economic sanctions on Russia could disrupt supplies.
“What we have made quite clear is that when we make a commitment to gas and electricity for customers we deliver on that,” said Chris O’Shea, chief executive of Centrica, the parent company of the UK’s biggest energy supplier. “We can deliver everything to consumers that we said we would.”
The escalation of the crisis in Ukraine, which world leaders fear could spark the biggest war in Europe since 1945, sent the price of oil above $100 a barrel for the first time since 2014 and resulted in a 40% rise in the price of gas.
O’Shea, who said he would not take his £1.1m annual bonus in acknowledgment of the soaring energy bills facing consumers, refused to comment on what the invasion might mean for bills. “It is unprecedented what we see at the moment,” he said. “I don’t think it will help anyone to speculate what this might mean [regarding prices]. We have to wait and see how this might unfold, it is absolutely unprecedented, we will have to wait and see.”
His comments came as Centrica reported a £767m pre-tax profit last year, compared with a £577m loss in 2020, helped by the £2.3bn sale of its Direct Energy subsidiary and the benefit of higher commodity prices at its oil and gas exploration business.
O’Shea defended the bumper year, saying that in line with its performance, the company had significantly increased its tax payments, to almost £500m. “Pre-tax profits across the globe are taxed highly so governments get their fair share,” he said. “Our tax bill is up almost £500m, there has been a huge tax windfall for governments. The vast majority has quite rightly gone to governments.”
The company also said it had paid back £27m it received in 2020 through the UK government’s coronavirus job retention scheme.
British Gas has taken on more than 700,000 customers from energy suppliers that have gone bankrupt because of soaring wholesale energy prices – the total is now at 29 – meaning last year was the first since 2010 it added customers overall.
Centrica said up to 1,000 roles would be cut this year, the last stage of a reorganisation that started in 2020 to remove 4,000 positions.
