Soaring energy bills hit home

Rising energy costs will hit home for millions of households tomorrow when Britain's biggest energy supplier hikes tariffs.

The move by British Gas, which supplies nearly half of UK households, will increase the average annual dual fuel bill by £190 a year to £1,219, meaning a monthly outlay of more than £100 for the first time.

As announced last month, its gas and electricity tariffs will rise by an average of 18% and 16% respectively, with customers in some areas seeing increases of up to 24%.

Scottish Power has already hiked bills, while Scottish & Southern Energy, Npower, E.ON have said they will raise tariffs in coming weeks.

The firms blame rising wholesale energy costs, although this argument has infuriated consumer groups who argue that households bills are at a record high despite wholesale costs being a third lower than their 2008 peak.

British Gas has hiked gas and electricity prices by around 44% and 21% respectively in that period, according to Consumer Focus.

The consumer body has called for a review of the energy market, including an end to complex tariffs and increased transparency to allow regulator Ofgem to judge whether bills are fair.

For the nine million British Gas customers affected by tomorrow's rise, household incomes are already being squeezed by steeper petrol, food and clothing costs, leading to fears that more could face a stark choice between heating and eating.

Ann Robinson, director of consumer policy at price comparison service, said: "As we head into autumn, the majority of British households will be facing the reality of substantially higher energy prices.

"This is going to put significant strain on family finances and will create considerable concern over winter energy bills this year."

She advised consumers to move to dual fuel tariffs, paying by direct debit, and signing up to a competitive online plan to reduce their bills.

EDF is the only one of the big six suppliers not to have announced a price hike, but Ashley Thomas and Daniel Vaun, utilities analysts at MF Global, said it could delay putting up its prices for a few more weeks as it tries to win customers.

British Gas has advised customers to wait and see what happens in the energy market before switching supplier.