Gas parent Centrica has posted half-year profits of £992 million for the six months to June 30, a 19 per cent drop on last year.

As customers reel from a 35 per cent hike in gas bills, the UK's biggest domestic energy supplier, which has 15.9 million customers, says it has been forced to pass on soaring wholesale gas prices after first raising bills in January.

On Wednesday, the group also upped electricity prices by 9 per cent, taking annual dual fuel payments to £1,317, £404 above the beginning of the year.

But while British Gas earnings were down more than two-thirds from last year's £533 million - when Centrica waited before passing on rapidly falling wholesale prices - the firm's production business saw a five-fold jump in profits.

Centrica's operating profits are more than £100 million ahead of the £880 million expected by City forecasts, and the company also upped its dividend payout to shareholders from 3.35p to 3.9p - a rise of more than 16 per cent.

The company's gas production and development operation benefited from this year's soaring gas prices to post operating profits of £638 million, compared with just £123 million during the previous year.

The group said the price increases were necessary to restore "reasonable profitability" to British Gas and invest in additional gas and power assets.

Chief executive Sam Laidlaw said: "We produced a good set of results in tough market conditions and against a record first half in 2007."

Last Friday, French-owned EDF Energy became the first major energy company to lift prices - 17 per cent for electricity and 22 per cent for gas - blaming record oil prices for the move.

And other rivals among the UK's "big six" are sure to follow EDF and Centrica after Scottish & Southern Energy last week said it was becoming "more difficult by the day" to resist hitting customers with higher bills.

Around 10 million customers face increases of up to 44 per cent, with households in London, the Midlands and southern England hit by the biggest hikes, according to reports.

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