CAMPAIGNERS have urged Scottish Gas owner Centrica to cut prices ahead of winter as an olive branch to consumers, after it increased profits at its residential arm by 23%.

Britain's largest supplier said profits at British Gas Residential – which has 15.8 million energy accounts in the UK, including Scottish Gas customers – increased to £345 million in the six months to June 30 after usage was boosted by the cool start to the summer.

However, the UK's biggest energy supplier also benefited from higher prices because, while it dropped its standard electricity price by 5% in January, this did not cancel out a 16% rise the previous August, when gas bills also went up by 18%.

Ann Robinson, Director of Consumer Policy at uSwitch.com, said: "These soaring profits show British Gas could and should cut its prices ahead of winter. This would go some way to acknowledging the pressure customers are under as they struggle to afford their household bills. It will also ensure that they too get to share the benefits of lower wholesale prices.

"If British Gas cuts its prices other suppliers will be under pressure to follow suit. A second wave of price cuts this year will not only help customers to better afford their bills, but would signal a commitment to rebuilding trust with its customers."

Audrey Gallacher, director of energy at Consumer Focus, added: "Customers need guarantees falls in wholesale prices will be passed on as fairly and quickly as rises in wholesale prices."

Profits at Centrica's residential arm are higher because of weak figures one year ago, when it delayed passing on price rises to customers, meaning it was supplying at a loss.

The rise meant British Gas Residential made £1.9m of profit a day as consumers struggled to cope after the average dual fuel bill rose to £1260 a year – £200 higher than two years ago, according to uSwitch.com.

Centrica said higher volumes and tariffs more than offset the higher commodity prices and other costs. But it claims to control just 15% of a customer's bill through its operating costs and profit margins.

Chief executive Sam Laidlaw said: "Centrica has performed well in the first half of 2012 despite challenging market conditions, although the increase in earnings must be placed in the context of unusually low levels of consumption and profits in the UK in the first half of 2011."

However, Which? executive director Richard Lloyd said suppliers must be more transparent. He added: "People should also remember they can vote with their feet and save money by switching."