British Gas cautioned in its 2014 annual report that the preliminary period leading to May 7 election would have a ripple effect on investments in energy sector in the United Kingdom. The energy supplier added the preliminary period has and could continue to result in consumer group lobbying, political statements and manifesto pledges that do not translate well into considered policy,

Centrica, the owner of BG, alleged the political debate currently taking place has aggravated uncertainty in the UK energy landscape and that could affect future power, storage and upstream investment. It will also have an impact on UK’s energy supply business. Moreover, the policy decisions to be implemented by the next government could mean potential pressure.

BG is operating on markets known to have detailed regulation and legislation throughout several jurisdictions and the complex structure continues to evolve so that any uncertainty, change or inefficient implementation of new responsibilities could have an adverse effects on its business. One consequence of such is a rising pressing on regulators to act, resulting in turn, in sharp fluctuations in investor confidence, an increase in the price of capital and a decrease in the credit worthiness of energy purchases.

BG faced continued political and regulatory scrutiny and the changes and interventions in the political or regulatory landscape and their impacts on its compliance obligations caused greater increased. The annual report further claimed that the Competition and Markets Authority investigation which is set to conclude at the end of 2015 could cause recommendations unfavourable to its business model.

The United Kingdom is among the territories that has increased dependence on gas imports, but technology and innovations serve as a regulator to fuel prices. In the second half of 2014, the drop in the price of commodities had a negative impact in its revenues. Despite the various turmoil it weathered in the previous years, Centrica holds on to a positive outlook.

“Centrica is deeply conscious of the cost-of-living challenge facing many of our customers. We remain focused on innovations as a way of helping our customers,” wrote Chairman Rick Haythornthwaite on the report’s opening statement.

For comments or feedback on the article, please contact the writer at selivak@ibtimes.com.au

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