BRITISH GAS is expected to post record profits this week, powered by Ofgem's decision to temporarily raise allowances for suppliers in the price cap.

The UK's largest energy firm, which is home to over 9m customers, is on course to report a massive boost in its earnings over the first six months of trading this year, when its owner Centrica unveils its second quarter results on Thursday.

Investec has estimated that British Gas profits could climb to £857m, a stark contrast to the relatively minor contributions Centrica's retail arm made to its massive profits last year - with the supplier making up just £77m of the energy giant's massive £3.3bn earnings last year.

Such hefty earnings would surpass British Gas's previous record profits of £585m set in 2010.

This follows energy watchdog Ofgem's decision to hike allowances for suppliers, which are factored into the price cap level to help companies cover the cost of supplying energy to consumers, with the aim of supporting market stability.

Previously, these allowances have been raised to recognise rising wholesale market prices caused by exceptional events such as the Covid-19 pandemic and Russia's invasion of Ukraine.

Martin Young, equity analyst for utilities at Investec, said the profits would likely trigger a "media frenzy about energy prices".

CENTRICA'S ROLLERCOASTER RIDE 2018 £1.39bn profilt 2019 £446m loss 2020 £135m loss 2021 £948m profit 2022 £3.3bn profilt

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