BRITISH Gas owner Centrica fuelled anger yesterday by posting an 11 per cent rise in annual pre-tax profits to £1.51bnn.

The record results came a week after the company inflicted its 17 million customers with a fourth inflation-busting rise in gas and electricity bills in two years.

Centrica yesterday insisted the stinging 22 per cent rise in bills, which come into affect from March 1, were still not enough to offset soaring wholesale costs, as British Gas made losses of £75m in the second half of last year.

The group said most of the improvement profits - up from £1.36bn in 2004 - came from its gas production and storage operations.

Centrica said the cost of wholesale gas has tripled since 2003, compared with a 70 per cent rise in household energy bills over the same period.

Chief executive Sir Roy Gardner said: "In 2005 we saw the highest wholesale and power prices since Centrica was formed in 1997, and the greatest year-on-year rises in the cost of both fuels.

"This clearly presented a massive challenge for all energy retailers and in particular for British Gas, as the largest supplier of both gas and electricity to the residential marketplace.

"With the unprecedented rise in commodity costs we chose not to pass through the full impact immediately to our customers.

"This led to a substantial fall in British Gas operating profits with an operating loss in the second half."

Centrica became the fifth supplier to raise prices or reveal new tariffs this year when it made its announcement last week.

Consumer group Energywatch said it was the "blackest day yet" in more than two years of spiralling energy prices.

"This is the most serious single event in two years of trauma for energy consumers," said Energywatch chief executive Allan Asher.

Centrica pointed out that the cost of wholesale gas rose 43 per cent in 2005 and has risen by a further 63 per cent so far this year. In contrast, bills went up 14.2 per cent in September and will go up a further 22 per cent next week.

"British Gas as a standalone business would not survive," said Sir Roy. He refused to rule out further increases in household energy bills this year.