Gas news | As costs rise, British Gas owner Centrica and Shell's earnings soar.

British Gas owner Centrica and Shell have posted huge profits due to rising energy prices, as UK households face even higher energy bills.

While Shell announced record profits for April through June, Centrica's half-year profits were five times larger than they were a year earlier.

It happens as gas prices are still rising as a result of the conflict in Ukraine.

With estimates that energy costs will increase even more next year, this is impacting households.

Every household in the UK will receive a £400 energy bill cut this fall as part of a new package of policies announced by the government to combat rising costs.

But there are now calls for further assistance for those in need, including those from Martin Lewis, a personal finance guru.

Owner of British Gas Centrica said that adjusted operating profit increased to £1.34 billion from £262 million a year earlier for the six months ended in June.

Instead of British Gas Energy Supply, which performed substantially worse, the company's nuclear and oil and gas businesses saw an increase in profits. The increase in wholesale gas costs hasn't been fully passed on by many businesses to the consumer.

Following three years of eliminating the interim dividend, Centrica has reinstated it at 1p per share.

Some have criticized the move to resume shareholder rewards even while UK consumers are under pressure from rising energy costs.

As homes struggle with bills, according to energy researcher David Cox, consumers will "react against" the image of an energy business paying shareholders.

Any oil and gas business that is now earning a profit and returning a portion of that to shareholders will come under fire, he warned. This is especially true given that energy costs are predicted to reach around £4,000.

Former British Gas employee Mr. Cox claimed that the company had stopped paying dividends in recent years because it "didn't have the money." But it had since made profits in its oil and gas exploration operations, which is why it is re-introducing payouts.

Businesses exist to generate a profit, and paying dividends to shareholders is one method to do that, he said.

However, Centrica CEO Chris O'Shea defended the choice and stated that a large portion of the company's profits was "flowing back into society."

"I am aware that when individuals are struggling, it might be difficult to see the phrases profits, dividends, or other comparable words. I'm very aware of this "said he.

"Bear in mind, over the next couple of years we are expecting to pay a windfall tax of probably well over £600m on our UK gas business off the back of the profits that we're seeing, so a lot of this is going back into society."

With second-quarter profits of $11.5 billion (£9 billion), energy major Shell also delivered impressive numbers on Thursday.

In addition to the $8.5 billion in shares it bought back in the first half of 2022, the business also announced a new $6 billion share buyback program for the current quarter. However, the 25 cents per share dividend was not increased.

Rising earnings from Centrica and Shell, according to Frances O'Grady, general secretary of the Trades Union Congress, are "an insult" to individuals who are having trouble paying their energy bills.

"The cost of energy is rising 23 times faster than the average pay. We must keep profits in check and raise salaries "She spoke. The pay pressure that working people are experiencing is the longest and hardest in contemporary times.

The gains disclosed by Centrica and Shell will be "greeted with disbelief" by those dealing with "rocketing energy bills," according to environmental advocacy group Friends of the Earth.

"A stricter windfall tax must be imposed by the government on energy companies. Instead of funding additional fossil fuel projects that further warm the globe, the majority of this revenues should be used to insulate our houses and assist financially constrained families in paying for their heating costs this winter."

The government imposed a windfall tax on UK oil and gas companies in May that could bring in approximately £5 billion over the following year.

Rising gas prices

Gas prices have increased significantly as a result of a global shortage of energy, and wholesale prices have increased as a result of Russia's invasion of Ukraine.

In April, UK energy costs rose by an astonishing £700, and this trend is expected to continue. A management consulting firm, BFY, has cautioned that, contrary to earlier estimates this month, the average annual energy expenditure may reach £3,850 by January.

According to BFY, their projection took into account the rise in wholesale prices over the previous two weeks as persistent tensions with Russia sparked worries about winter supplies. Over the past year, numerous energy providers have failed as a result of their struggles to pass on rising gas prices to customers. Since August 2021, at least 30 energy companies have ceased operations in the UK.

In the first half of the year, British Gas reported adding more than 200,000 new customers, including 158,000 from the company's bankrupt energy supplier Together Energy.

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