 Power and gas prices will increase from 20 September, British Gas said |
British Gas customers will be badly hit by the company's price hikes, with thousands put at risk of "fuel poverty," a consumer group has warned. British Gas announced the cost of gas will rise by 12.4%, while the price of electricity will go up by 9.4%.
Energywatch said next month's increases were "a body blow to consumers".
"This price rise is going to add millions to bills and expose many thousands of households to the risk of fuel poverty," said boss Allan Asher.
British Gas has acknowledged that some customers may struggle to cope with the increase, which it blames on the rising wholesale cost of gas, and has set aside �10m to protect vulnerable customers. However, it is unclear how this money will be distributed.
 |  Our message to British Gas customers is to shop around and get yourself a better deal  |
Energywatch gave the fund a cautious welcome, but said overall it was "seriously bad news for millions of consumers".
"It is no surprise that British Gas have responded to the rising wholesale cost of gas, but it is by no means clear why the wholesale price is so high," Mr Asher said.
He added that Energywatch would be calling for an investigation into the wholesale market.
Industry regulator Ofgem also criticised the increase, and urged British Gas customers to change supplier, saying there were "no prizes for loyalty".
"Our message to British Gas customers is to shop around and get yourself a better deal," a spokesman told BBC News Online.
However, Ofgem itself was criticised by former energy minister Brian Wilson.
He said the latest price increases demanded an urgent rethink of Britain's proposed reliance on imported gas and the role of Ofgem.
| IMPACT ON AVERAGE BILL* Gas paid quarterly: �422 a year to �474 a year Gas paid by direct debit: �378 a year to �425 a year Electricity paid quarterly: �257 a year to �281 a year Electricity paid by direct debit: �245 a year to �268 a year Prepayment gas: �422 a year to �474 a year Prepayment electricity: �273 a year to �299 a year *Average usage and prices include VAT. Source: British Gas |
"Both within government and subsequently, I have been warning about the extreme short-termism of the policies being pursued by Ofgem."
The new prices come after British Gas put up prices for its 6.2 million electricity customers and 18.4 million gas customers in January, when it added an extra 5.9% to customers' bills.
The latest increases take effect from 20 September and are expected to add an extra �52 a year to a typical gas bill, which is paid quarterly.
The cost of wholesale gas has risen sharply in the past year, partly as a result of higher crude oil prices.
Competition
For electricity, the new prices are expected to add an average of �24 a year to a typical bill, paid quarterly, or �26 a year for customers who pay by a prepayment meter.
There are six major gas and electricity suppliers and a range of smaller suppliers which disgruntled British Gas customers could switch to.
Powergen has already increased its prices twice this year and the other gas and electricity suppliers are expected to follow suit.
"Historically... when British Gas puts up its prices, the other suppliers tend to follow suit," said Jenny Evans, spokesman for energy comparison website Uswitch.com.
"But while wholesale gas prices have increased dramatically over the last year, these rises are the highest we have seen from any supplier."
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