British Gas stokes up prices by 15% as bills head for £1,000 a year

British Gas has announced a massive 15 per cent increase in its gas and electricity prices, topping recent hikes from npower and EDF Energy.

A statement from Centrica, which owns British Gas, said that since it last increased its prices in late 2006 – by 12 per cent – wholesale energy prices had risen sharply. The increases announced by the company will affect 11 million customers.

Last week, EDF also raised its gas and electricity prices – by 12.9 and 7.9 per cent respectively for 5.5 million customers.

Npower, the first supplier to turn the heat up on energy bills in 2008, increased retail gas prices by 17.2 per cent and electricity by 12.7 per cent.

Energy companies are under mounting pressure to rein in their price hikes. Consumer group Energywatch has criticised providers for being too quick to raise charges, and Chancellor Alistair Darling has written to the industry regulator, Ofgem, expressing concern at the increases.

However, Ofgem has rejected calls to refer the energy market to the competition authorities.

Three of the big six energy companies have now raised their prices and most experts expect the others to follow suit over the next couple of months, pushing average energy bills above £1,000 a year for the first time.