British Gas announced a 58 per cent increase in residential profits this week, raising hopes that further cuts in energy prices could be on the horizon.

Critics have accused British Gas of profiteering while credit crunched consumers have suffered the coldest winter for 30 years, and that energy companies should have cut energy prices sooner.

British Gas Residential has reported that profits have risen from £376million to £595million year-on-year, and it has already given its gas customers a seven per cent price cut already this year, but energy prices are still considerably higher than they were two years ago.

Following its price cut this month, British Gas now boasts that it offers the cheapest average dual fuel tariff of any major UK provider, but comparison website uSwitch.com is calling on all energy suppliers to act now and help consumers to cope with their winter fuel bills, as forecasters predict more bad weather is on the way.

uSwitch.com believes that British Gas’ profits represent ‘overwhelming evidence’ that more price cuts are due.

Ann Robinson, director of consumer policy at uSwitch.com, comments: “There is now clear evidence that energy suppliers are benefitting from lower wholesale prices. With Britain’s biggest supplier reporting a 58% increase in residential profits in the same week that Ofgem, the industry regulator, reported an estimated £30 increase in suppliers’ margins, the weight of evidence in favour of further price cuts is stacking up.”

As the only supplier to have cut energy prices for its customers so far in 2010, Ms Robinson believes it is “time for the spotlight to be turned on the remaining five suppliers who are yet to say a word.”

But while these profits suggest that more price cuts could well be in the pipeline, there is no certainty that households will see their energy bills fall, so Ms Robinson urges them to not be complacent, but to compare deals and switch energy provider.

Consumers could save up to £300 a year by moving to an online energy plan, she said, which are ‘consistently cheaper’ than standard plans, but only 1.3million households are signed up to them, wasting valuable savings.

Ms Robinson adds: “Moving to an online plan presents the biggest and best chance of a price cut many households can expect this year.”

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