British Gas owner Centrica feels cold blast from critics

Although the City pages of Saturday's papers may focus on Centrica's trading patterns, outlined in a statement issued on Friday, the front page news is likely to be the energy provider's thinly veiled warning that fuel bills are set to go up later this year.

Centrica, which provides energy under the British Gas and Scottish Gas brands, said that UK wholesale gas costs are around 15% higher for next winter than last, and non-commodity costs are expected to add a further £50 to the cost of supplying the average household this year. "The trend for retail energy costs remains upwards," the group warned, in a statement issued ahead of its annual general meeting (AGM).

That piece of information set alarm bells ringing at the national charity, the Citizens Advice.

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"The prospect of further rises in fuel bills will be a huge worry for many people who are already struggling to cope with last year's increases," predicted Gillian Guy, the Chief Executive of Citizens Advice.

"Many household budgets are at breaking point and we urge British Gas to think about its customers and the extra pressure any rise will put on their finances. Energy companies need to keep prices as low as possible to avoid more people being pushed into fuel poverty or debt," Guy said, adding that anyone who is struggling with their fuel bills can get advice from their local Citizens Advice Bureaux.

uSwitch.com, a web site that specialises in enabling people to compare the prices of UK energy providers, also picked up on Centrica's alarming news, and noted that British Gas is the second big utility company to run up a red flag over rising wholesale gas prices.

"This is deeply worrying as consumers are still struggling to come to terms with the £224 or 21% increase in bills from the end of 2010 and only enjoyed a £41 or 3.2% reduction at the beginning of this year," said Tom Lyon, an energy expert at uSwitch.com.

Almost all of the major UK energy providers announced cuts to their electricity tariffs earlier this year, with E.ON's 6% cut topping the 5% reduction in a typical bill announced by British Gas.

"For consumers, it's clear that suppliers are warning of trouble ahead. I would urge them to prepare for the worst and to ensure that they are on a competitively priced energy plan and to make their homes as energy efficient as possible by taking up one of the many subsidised insulation offers available on the market," Lyon added.

"Suppliers have a pot of money to spend on helping their customers with energy efficiency. More importantly, they are moving towards a deadline to have spent it which means that many households could be in line to benefit," Lyon observed.

The looming threat of Centrica upping fuel bills for residential customers is unlikely to go down well with newspaper editorial writers who are already on the company's case for what is seen as an overly generous package for Centrica Chief Executive, Sam Laidlaw, who has seen his basic pay package go up from £873,000 back in 2007 to £950,000 in 2011, on top of which he gets various other top-ups; The Guardian newspaper reported that Laidlaw's total package was worth £1.3m in 2011 and could end up being worth £4.3m if long-term performance targets are met.

Centrica shareholders get to vote on Laidlaw's remuneration package at the AGM; if they follow the zeitgeist, the vote could be another example of shareholders rising up to protest against fat cats in the board room.

Such protests have already claimed the heads of the chief executives at insurance giant Aviva and Daily Mirror publisher Trinity Mirror, while the remuneration committees at advertising agent WPP, car dealer Pendragon and bookie William Hill have also had their knuckles firmly rapped.