Yet another major energy supplier in the UK has come forward to showcase their huge increase in profits. This time, it was Npower who announced that they have seen an increase in profits of close to 25%.
Government officials said that they were simply out raged with the increase in profits. In fact, some MPs even went as far as to call Npower “despicable.” They are, of course, referring to the fact that most of the UK is in fuel poverty right now, and they are announcing huge profits.
This announcement of a 25% increase in profits comes just months after the company announced yet another huge price hike. At the time, Npower said that the price hike was due to the increase in wholesale energy prices. However, if this was the case, how was the company able to turn a 25% increase in profits?
According to earning reports, Npower made close to £390 million from their energy generation and supply business last year. This is, of course, up from the £313 million that they made in 2011. Once again, this increase came after an 8.8% increase in gas prices and a 9.1% increase in electricity. Reports show that the average consumer bill jumped by £108 a year. This brings the average yearly energy bill up to £1,352 a year.
Of course, some people did say that enough was enough. Npower did see a pretty large decrease in consumers, as 70,000 people left the company to find cheaper energy. That being said, Npower still has over 3.8 million customers.
It is not fair, however, to point all of the blame on Npower. Other energy companies around the UK are reporting high profits as well. For example, British Gas recently confirmed that they made close to £606 million last year. British Gas was also another one of the large energy companies that increased its prices.
Of course, it makes perfect business sense for energy companies to increase their prices right now. People want to believe that they will do the right thing, but they are looking to make a profit. When there is an increase in demand and supply is low, the best business move is to increase prices to make more capital. That is just what energy companies all over the UK are doing. Unfortunately, this means that their consumers have to suffer.