Centrica, owner of British Gas, today revealed profits of nearly £1 billion and a £144.6 million dividend payout for its shareholders just hours after unveiling the largest energy price hike in UK history.

Centrica said group operating profits were £992 million for the first half of 2008, 20 per cent lower than the same period last year. It also announced that its investors will receive a 16 per cent increase in the dividend for the first six months to June 30.

Yesterday, Centrica unveiled huge rises in energy bills which could increase the cost of gas and electricity for some of British Gas's 10 million customers by up to 44 per cent.

The average gas bill will rise by 35 per cent while electricity will increase by 9 per cent.

The company's chief executive, Sam Laidlaw, who will receive payouts worth £46,000, defended the double-digit dividend rise as a "purely mechanical" payout based on the company's strong performance during the previous year.

Jake Ulrich, managing director at Centrica Energy, who earlier this year suggested consumers wear two jumpers instead of one to reduce their heating bill, is in line for a dividend payment of £116,000.

Mr Laidlaw claimed the steep rise in energy bills was necessary because of rising wholesale energy prices and the need to invest in new sources of low carbon energy.

“The UK is no longer self-contained from an energy perspective,” said Mr Laidlaw. “The wholesale price [of gas] has gone up by 90 per cent. If we are going to remain a viable business then this price rise is necessary.”

He rejected claims that UK consumers were now paying among the highest gas bills in the world, claiming that Europeans were being charged more, although he acknowledged that “we are catching up”.

The announcement came as another energy giant, Royal Dutch Shell, the world's second biggest oil company, reported a rise in second-quarter profits to nearly $8 billion (£4 billion), driven by the soaring price of oil, which touched a record high of $147 earlier this month.

Jeroen van der Veer, Shell's chief executive, said the results were "competitive" and that the company's strategy was "on track".

Centrica's profits will be particularly galling for UK consumers struggling to deal with soaring prices for a range of consumer goods, including food, petrol, mortgages and insurance.

The company, which has 16 million UK customers, introduced average increases yesterday of 35 per cent for gas and 9 per cent for electricity. However, it also launched a regional pricing structure for gas, which means consumers in some areas, such as London and Southern England, will be hit by a 44 per cent increase in their gas bills, with immediate effect.

Nick Luff, Centrica’s finance director, said the company was only able to source 30 per cent of its gas supplies from its own fields, including one at Morecambe Bay.

It needed to import the remainder from countries such as Norway and the Netherlands and was thus having to pay international prices for them.

The results contained a 69 per cent plunge in profits from British Gas Residential, its UK household supply business, to £166 million from £533 million in 2007.

The bulk of profits came from British Gas Services, its central heating repair and maintenance arm, and from Centrica Energy, its wholesale arm.

Centrica said its tax bill had risen to £577m, up from £411 million.

The company said it was paying up to 75 per cent on its Morecambe Bay and other gas production fields and claimed to be the second highest tax payer in the FTSE 100, at a rate of 58 per cent of group profits.

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