ALMOST a million customers have deserted British Gas this year, after the UK’s biggest energy group raised its prices by 21 per cent.

Centrica, the owner of British Gas, was forced to promise yesterday that it would not raise prices again this winter. The company said that it would instead absorb the cost of unprecedented rises in wholesale gas and electricity prices.

Centrica shares yesterday fell 7 per cent to 229¾p, as analysts adjusted their forecasts on learning that the margins of British Gas were likely to fall below the 7 per cent achieved in the first half of the year.

Wholesale gas prices rose by 32 per cent in the second half, while electricity prices rose by 18 per cent. British Gas imposed a 21 per cent increase in energy prices in September, which prompted 630,000 customers to switch to other suppliers of gas and electricity — on top of the 290,000 customers who switched in the first half.

A spokesman for Centrica yesterday said that the number of customers leaving British Gas had tailed off as rival suppliers announced similar price increases. Centrica can cover only 30 per cent of its customer requirements from its upstream assets.

It has to buy the remainder of its gas supply on the open market, in which prices are at record highs.

The group said in a pre-close trading statement that, despite pressure on its margins, results for this year and 2005 would be in line with market expectations, as rising gas production helped to boost profits.

“In summary, the key issue facing Centrica in 2005 is the current level of UK wholesale energy prices,” the group said. “As a result, operating margins are now expected to be lower than previously anticipated in British Gas, Centrica Business Services and industrial and wholesale.”

Centrica will offset part of the rise in wholesale gas prices through cost reductions. The group previously said that it would cut 850 jobs this year.

Phil Bentley, the group’s finance director, yesterday said: “Centrica continues to believe that 8 per cent is an appropriate and achievable net profit margin target for the British Gas business.”

Centrica has previously said that it would spend £2.5 billion on buying new sources of gas and gas storage facilities over the next five years. The depletion of gas reserves in the North Sea and the Irish Sea is pushing up wholesale prices. It is expected that Britain will have to import 75 per cent of its gas by 2015.

Last month, Centrica was beaten to buying BP’s Ormen Lange Norwegian gas interests by Dong, the Danish state-owned oil and gas group.

Centrica said that the cost of the billing system it is installing for British Gas had risen to £430 million, from its previous estimated cost of £400 million.

The company yesterday maintained its commitment to dividend targets for this year and 2005. Centrica has committed itself to paying a full-year dividend equivalent to a 40 per cent payout ratio this year, rising to 50 per cent in 2005.

Analysts are expecting a 2004 operating profit of £1.2 billion and a 2005 operating profit of £1.33 billion.