Scottish Gas owner Centrica has said it would use profits from the prolonged winter freeze to keep prices down during the months ahead.
The energy giant saw earnings in its retail division soar during the early part of the year after hiking prices by 6% in December, with domestic gas consumption increasing by nearly a fifth during the first four months of 2013.
Reporting to the markets yesterday, the firm said its board had agreed to use any “benefit arising” from the extended winter to “maintain price competitiveness”.
The group, which has courted controversy over price increases and bonus payments to executives, said it recognised the economic pressures facing many of the households it serves.
The announcement came on the day of Centrica’s annual meeting in London.
Earlier this year the energy company disclosed that five bosses received £16.4 million in pay and bonuses as British Gas made profits of £606m, equivalent to nearly £50 per household.
In yesterday’s trading update, Centrica said it had “performed well” so far this year, with residential gas business on course to deliver full-year profits in line with expectations of £602m slightly down on last year due to higher costs.
“As a result of the unusual period of extended cold weather, average residential gas consumption was 18% higher in the first four months of 2013 than in the same period in 2012, and average residential electricity consumption was 3% higher,” the firm said.
“Recognising the economic pressures facing many of our customers, the board has determined that any benefit arising from the exceptionally cold weather will be used to maintain our price competitiveness,” it said.
“As a result of this decision, we expect the residential energy supply business to deliver an operating profit for the full year in line with expectations, weighted towards the first half.”
A spokesman said the profit boost would be used to hold prices for “as long as possible”.
The company also revealed that so much energy was used during the cold spell that volumes at its Rough offshore gas storage facility reached a record low level in April.
Performance from its international upstream oil and gas assets had been “good” in the year, with anticipated production of 75m barrels of oil equivalent up from the 67 mmboe realised last year.
Development projects will bring an extra 86 mmboe into production by 2016.
Centrica also said it had made a proposal to the UK Government over the economic framework for its Race Bank windfarm project, but warned that ongoing negotiations may take “some time to resolve”.
The firm, which is £66.5m into a £500m share buyback scheme, also announced the appointment of Michael Linn as a non-executive director and member of the group’s audit, nominations and remuneration committees.