THE owner of Scottish Gas has said it will leave energy tariffs unchanged this year despite a squeeze on profitability at its household supply business.

Centrica shares opened 4% lower as it revealed group profits will be lower than expected, partly due to the impact of the mild winter on consumption and the loss of 180,000 residential accounts in the year to date in a fiercely competitive market.

It expects residential supply revenues to be around 10% below 2013 levels and margins to be around 4% which is lower than last year's figure of 4.5% and below the level it believes is required to underpin investment.

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The company said: "Assuming energy market conditions remain benign, and recognising the competitive conditions in the UK energy supply market, we do not currently expect to change our residential energy prices in 2014."

It said the average Scottish Gas residential energy bill was around 10% lower this winter than last, with average consumption of gas and electricity down by 25% and 10% respectively in the first four months of the year.

The company, which finished last year with 15.2 million customer accounts, said competition was fierce, particularly from smaller suppliers who are benefiting from an exemption from some environmental obligations.

It said market prices for gas and electricity have declined since the start of the year but it expects upward pressure on costs next year.