The company’s owner, Centrica, has issued a release saying that electricity will be increasing by nine per cent and gas by 35 per cent. The price of British Gas’ dual fuel tariff will increase by 25 per cent, except for dual fuel prepayment customers who will suffer a 21 per cent increase.

British Gas says that it is acting on the back of drastically reduced profits – Residential Gas profits are down 69 per cent – but has promised there will be no further price increases for standard tariff custoemrs in 2008.

There will no price increase for the 2.1million British gas customers who are on a fixed tariff, and in conjunction with the hike in cost for other customers, it has launched a premium fixed price tariff which guarnatees prices until September 2011.

It will also not be increasing the cost of fuel to vulnerable customers until April next year, saving each home £214 as part of its new Essentials Extra. It will also be offering them efficiency measures to help reduce the cost of fuel bills in the future.

This is the second increase from British Gas in the space of six months, and represents an average increase to the consuemr of £230 for gas and £37 for electricity and is effective from today.

uSwictch.com has deemed it the “second nail in the coffin for affordable energy”, adding that the average cost of household energy is now £1,126 a year.

The news comes amid speculation that EDF has pulled its fixed price plan, as households are urged to seek out what few capped deals they can find as other suppliers are expected to follow suit with a second wave of price increases.

Some experts predict that the annual cost of fuel will increase by 40 per cent before the end of 2008, driving up household bills to an average of £1,467 – accounting for five per cent of a household’s net income, and a record 61 per cent increase in one year.

British Gas managing director, Phil Bentley, said: “We very much regret that we have had to make this decision at a time when many household budgets are already under pressure.

“The simple fact though, is that we have entered an era of unprecedented high world energy prices. The only answer to cope with higher energy prices, I’m afraid, is for all of us to be more energy efficient and we will be contacting all our British Gas customers to show how they can save energy to try and offset these price rises.”

The potential increases in fuel bills will “be a lot for households to absorb and will prove impossible for some”, director of consumer policy at uSwitch.com said.

Experts are urging consumers to switch energy provider now to ensure they are getting the cheapest possible deal, and to move onto a fixed tariff to avoid being hit by future hikes.

Ms Robinson added: “Consumers should begin to make the adjustment now by cutting back on their energy usage and making sure that they are paying the cheapest available price for what they are using. This will help limit the impact of soaring energy prices bills.”

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