British Gas owner enjoys boost from soaring oil and gas prices amid growing windfall tax calls

British Gas owner Centrica has said it expects to post annual earnings at the top of its targets amid intensifying calls for a windfall tax on energy firms.

The company said it has been boosted by “strong” volumes across its nuclear and gas production operations while its trading business has also increased volumes of gas and renewable energy to improve UK supply amid pressure from the Russian invasion of Ukraine.

It expects make earnings of between 6.7p and 10.8p per share this year, up from 4.1p last year.

Centrica also told shareholders it has “managed increased commodity price volatility well” in recent months.

In a statement, Centrica said: “In British Gas Services and Solutions we have seen some supply chain disruption and higher inflation impacting both the cost base and customer demand.

“We expect those headwinds to continue to, at least partially, offset underlying operational progress for the duration of this period of higher inflation.”

“Significant uncertainties remain over the balance of the year, including the impacts of weather, commodity prices movements, asset performance and the potential for increased bad debt charges given the current inflationary pressures in the UK.”

The update follows reports of record underlying profits in the latest quarterly updates from energy giants BP and Shell.

Both firms have rebounded from the pandemic with strong trading in oil and gas, powered by soaring commodity prices.

This has led to renewed calls from the Labour Party for a windfall tax on North Sea oil and gas companies, and demands from the government for companies to commit to ambitious domestic spending plans to ensure secure energy supplies.

Alongside the strong trading update, Centrica announced it has set up a support fund that provides grants of up to £750 to help customers pay their energy bills.

Energy bills have spiked to nearly £2,000 per year, with expectations of a further hike this October, deepening the cost of living crisis.

It will also bolsters its customer services team to deal with the sharp rise in the number of distressed customers who are struggling to cope with spiralling energy bills.

Centrica will recruit another 500 people to field calls from the growing number of people calling with concerns about being able to heat their homes.