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British Gas has lost its crown as Britain’s largest household energy supplier after being overtaken by Octopus Energy.

Octopus serves 12.9m household accounts, according to industry analyst Cornwall Insight – 0.6pc more than British Gas, which has held the top spot since it was privatised by Margaret Thatcher in 1986.

If confirmed, it represents a humiliation for Chris O’Shea, chief executive of British Gas parent Centrica – and a triumph for Greg Jackson, head of Octopus, which launched nine years ago. The two men have a long-standing rivalry said to extend well beyond the purely commercial.

The fall of British Gas follows years of complaints over its customer service. The consumer group Which? on Friday named it as the joint-worst supplier in the country, following a survey in which Octopus came top.

Cornwall Insight said: “Measured by the total number of electricity and gas accounts it has on live supply, as of Oct 31 2024, Octopus Energy held a 23.7pc share of the available market, 0.6pc higher than the supplier with the second-largest share of household energy accounts [meaning British Gas].

Mr Jackson said he was delighted by Cornwall Insight’s findings.

He said: “We became Britain’s biggest energy supplier by relentlessly delivering better service, lower costs and more innovation. We’ve invested heavily in technology to deliver this rare combination of rapid growth and outstanding service.”

Market reduced since pandemic

Octopus was able to spread its tentacles partly because the number of suppliers in the domestic energy market has greatly reduced since the Covid-19 pandemic.

In 2019, small and medium suppliers held over a 30pc share of the domestic energy market.

Over half of suppliers left the market or collapsed during the energy crisis following Russia’s invasion of Ukraine, with Octopus gaining many of their customers.

Six energy companies hold more than 90pc of the household energy market, with 8.9pc of the market held by small and medium suppliers outside these companies.

Dan Morris, the chief executive of Cornwall Insight, said: “This is quite honestly the biggest development in the domestic retail energy market since it opened. Octopus Energy started from zero market share in 2015 and has worked its way up to the top spot on this measure in less than a decade. This is a notable achievement in the highly competitive and tightly regulated UK supplier market.”

The Which? research criticised British Gas – which made a record £750m profit in 2023 – for its smart meter offering and complaints process. British Gas came joint last place with Ovo Energy and So Energy as the public’s least favourite supplier.

However, British Gas’s 10m customers dwarf Ovo and So Energy’s customer numbers of 5m and 300,000 respectively.

British Gas was hit with 1.4m complaints from billpayers in the 18 months to July last year, which led to parent company Centrica recruiting 700 more customer service employees the previous November.

Mr O’Shea faced criticism for being paid an £8.2m salary in 2023, amid controversy over the company’s customer service. He later told the BBC that his pay was “impossible to justify”.

Phillip Amy, Which?’s commercial director, said: “In our latest annual energy supplier survey, Octopus was awarded the highest overall score and named a Which? Recommended Provider for the eighth year in a row. Customers gave Octopus five-star ratings across most categories – including for overall customer service, ease of contact and accurate payments.

“Octopus has maintained its status as a recommended provider for several years running as it has increased in size. It must continue to provide the customer service, support and value for money that its customers have rightly come to expect.”

Last year, in its accounts for 2023, Octopus Energy reported it had 3.5m customers for either gas, electricity or both, with an operating profit of £243m. Octopus’s website claims a higher figure of 5m customers for that year.

Centrica’s accounts for 2023 state that at the time, British Gas Energy had 7.5m residential energy customers and 552,000 business customers. It made an operating profit of £751m.

However most households actually have two accounts – one for gas and one for electricity – and some have separate providers for each.

This can lead to double-counting, where one household is counted as a customer for two suppliers,

Cornwall Insight avoided this problem by counting gas and electricity counts separately.

A household using both gas and electricity (dual fuel) was counted as two accounts – so its final figure for Octopus reflects the total number of gas and electricity accounts, not the number of households.

Centrica said: “Centrica has a unique position within the UK’s energy system.

“We operate across the entire energy chain, from nuclear, to renewables to gas storage to promote energy security, to decades long LNG supply deals. We have a £4bn green energy investment programme investing between £600m-£800m a year – and energy supply is just one part of our total portfolio.”