Centrica, the owner of British Gas, is expected to smash its earnings record this week and post profits of about £2 billion for 2007, an increase of more than 40 per cent on the previous year, according to consensus estimates by analysts.

The announcement on Thursday is likely to provoke accusations that energy suppliers are exploiting consumers. It will come only a month after British Gas raised prices for 11 million gas and electricity customers by 15 per cent.

Allan Asher, of Energywatch, the consumer group, said that he would examine the Centrica results and those of other British suppliers for evidence of overcharging.

“All of these suppliers are going to post huge profits for 2007,” Mr Asher said. “Our concern is that when wholesale prices go up, they are quick to raise domestic prices, but when they go down, they are very slow to pass the reductions on.”

Energywatch is contributing evidence to an investigation into the retail energy market announced this month by the Select Committee for Business, Enterprise and Regulatory Reform.

Sam Laidlaw, chief executive of Centrica, is likely to point out at the annual results that, despite a strong performance in the early part of the year, the profitability of its core British Gas Residential division fell sharply. That left Centrica, he is expected to say, with little choice but to raise prices last month to restore margins for 2008.

British Gas Residential, the largest and most profitable of Centrica's eight businesses, posted a £533million profit in the first half of 2007. Analysts believe that it was barely profitable in the second half after wholesale energy prices surged, tracking record global oil prices of nearly $100 per barrel. It may have ended the year at a loss.

The bulk of the profits earned by Centrica last year are expected to come from other parts of the business, including Direct Energy, its North American energy business, and the upstream division Centrica Energy.

Centrica is also likely to emphasise that the rising cost of investing in renewable and low-carbon electricity generation to meet tough new renewable-energy targets set by the European Union will mean rising prices for consumers.

The cost of building offshore wind farms is estimated at about £2billion per gigawatt of generating capacity, compared with less than £1billion for a traditional gas-fired power station.

Mr Asher rejected this argument. “Where is the evidence that these companies are really investing in renewables?” he said. “The UK is a long way behind the rest of Europe in developing this type of energy.”

Meanwhile, an Early Day Motion in Parliament calling for an investigation into UK energy prices by the Competition Commission has been signed by 74 MPs.

The motion, tabled by the Labour MP John Grogan on February 4, highlights concerns about a perceived lack of competition in Britain and asks the Government “to instruct the Competition Commission to conduct a full market investigation and where necessary take action to increase competition”.

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