SHARES in British Gas owner Centrica held firm yesterday after the company warned it was prepared to raise prices again.

The group announced it had lost 382,000 energy accounts already this year, but said its first-quarter performance had still been good.

About 1.1 million customers have deserted the company since Centrica decided to join rivals in twice raising bills to combat rising energy costs.

The nation's largest power supplier now pays 40 per cent more for gas to be delivered than it did in December.

In a statement to the Stock Exchange, Centrica said weekly sales had started to recover.

Shares initially fell as much as 1.8 per cent to 213p, the stock's lowest price since late October, but rallied to close at 221p.

The company has been hit by rising wholesale energy prices and confirmed it would increase bills again to protect profits.

Chief executive Sir Roy Gardner said: "Financially, we have had an encouraging start to the year, but the winter period remains uncertain for all energy suppliers in the light of continued increases in forward wholesale commodity prices.

"We will continue to take all the steps we can to mitigate the impact on our customers, but retail price rises across the whole of the industry cannot be ruled out."

Its decision to raise bills twice last year helped to protect its shareholders and lift annual profits at its British Gas operation by 64 per cent, but that came at a cost of more than 1.1 million customers who left for rival suppliers.

Centrica has been criticised in the past by price comparison service uSwitch for using rising wholesale gas prices as an excuse to increase profits.

But the company must also satisfy regulators that it is not resisting increases in household bills merely to put pressure on rivals, who lack its financial muscle.

Sir Roy told shareholders that progress was being made in eliminating costs, while a new billing system was due to be piloted from the middle of the year.

He believes the market is overreacting and wholesale gas prices do not reflect demand and supply.

The group expects to complete its £500m share buy-back programme by August.