British Gas set to raise gas and electricity prices

Centrica-owned company – which serves about 12m homes – expected to raise prices on Friday

Millions of Britons face another rise in household bills with British Gas, the UK’s largest energy supplier, set to announce a rise in its gas and electricity prices.

The Centrica-owned company, which serves about 12m homes, could announce as early as Friday that its charges could increase in the high single percentage digits.

The average British Gas annual dual-fuel bill for gas and electricity currently stands at £1,260 – meaning a 5% increase would add £63, while an 8% rise would put on £100.

A British Gas spokesman said: “We do not comment on future pricing movements. We do not comment on speculation about future pricing movements.”

The report comes as rival SSE prepares to increase tariffs by 9% on average on Monday, hitting about five million electricity customers and 3.4 million gas customers.

British Gas put gas and electricity tariffs up by 18% and 16% respectively in August 2011, blaming higher wholesale costs, but this was followed by a drop of 5% in electricity tariffs in January when prices eased.

The supplier is expected to say it was forced into the move by higher wholesale prices and the rising cost of using the National Grid network.

British Gas warned in May that its costs were rising, with wholesale gas prices 15% higher for the coming winter and other charges set to add about £50 to the cost of supplying the average household this year.

But the division provoked outrage in July after it announced a 23% leap in profits, admitting last year’s price rises helped it rack up operating profit of £345m in the first half of the year.

Caroline Flint, Labour’s shadow energy and climate change secretary, said people would “not understand why British Gas are putting prices up”.

She said: “Unless ministers get to grips with spiralling energy bills, people will rightly think that this government is completely out of touch with families and pensioners struggling to make ends meet.”

Other big suppliers – including EDF, Scottish Power and nPower – are not expected to follow suit and announce higher prices. E.ON is the only supplier to guarantee a price freeze for 2012.

Further utility bill increases will hit the Bank of England’s inflation forecasts, which predicted a gradual slide in the consumer price index rate towards the end of the year and into 2013.

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