Centrica move – which follows SSE's price rise last week – will add £107 to the average annual dual-fuel bill with British Gas
British Gas will raise energy prices by an average of 9.2% next month, piling further financial pressure on 7.8 million households and reigniting the political row over soaring gas and electricity prices.
Parent company Centrica became the second of the big six energy firms to announce a price rise after SSE raised prices last week. The average annual dual-fuel bill with British Gas will increase by £107 to £1,297.
Centrica blamed the above-inflation hike on higher costs for wholesale energy and delivering gas and electricity to homes, and government's "social and environmental programmes" which are paid for through customers' bills.
Electricity bills will rise by 10.4% and gas bills by 8.4% from 23 November. With usage and regional variations this equates to an average price rise of 9.2%, Centrica said.
The move escalated the row between energy providers and the Labour leader, Ed Miliband, who accused SSE of "ripping off" customers after itannounced an 8.2% price rise for its 7 million customers.
Caroline Flint, Labour's shadow energy and climate change secretary, said the latest rise by British Gas showed "clearer than ever" why Miliband's proposed 20-month energy price freeze was needed.
British Gas said on Thursday that although it recognized energy bills were a "real worry for hard-pressed households", the decision was down to rising costs "that are not all directly under our control".
Ian Peters, managing director of British Gas residential energy, said: "I know these are difficult times for many customers and totally understand the frustration that so many household costs keep on rising when incomes aren't keeping pace. We haven't taken this decision lightly."
He said the best way to keep bills down was by increased energy efficiency, and urged customers to check whether they were eligible for measures such as insulation.
Tom Lyon, an energy expert at uSwitch.com, said the rise would leave customers feeling "betrayed".
"Today's price hike will be seen by many as a broken promise after the supplier suggested in May that it would use the extra profits it made last winter to hold off from any price hikes.
"British Gas customers have had the rug pulled from under their feet and I suspect that many will be feeling let down and betrayed."
The company, however, insisted it was making "fair profits" for "keeping homes warm and keeping the lights on".
It said it was offering a new tariff which guarantees that prices will not go up until 30 November 2014. If standard prices fall, the fixed tariff will fall too, it said.
Clare Francis, editor-in-chief of Moneysupermarket.com, said other energy providers were likely to follow the move.
"It won't stop there. We can expect the other four major providers – EDF, E.ON, npower and Scottish Power – to also announce price hikes over the coming weeks."
