A 5.5%, or £60 a year, rise in energy prices for British Gas customers on default deals has been branded as “unjustified” by the government.
The company, the UK’s largest energy supplier, said that 4.1 million of its customers would be affected.
The increase will take effect from 29 May and follows its 12.5% rise in electricity prices last September.
British Gas argued that it was raising prices owing to factors beyond its control, such as wholesale costs.
The 5.5% increase, which applies to both gas and electricity, will see the average annual standard variable dual-fuel bill for British Gas customers go up to £1,161.
Energy minister Claire Perry said: “We are disappointed by British Gas’s announcement of an unjustified price rise in its default tariff when customers are already paying more than they need to.”
Energy regulator Ofgem described the increase as “unwelcome” and encouraged householders to shop around.
Those who pay their bill by cash or cheque will see an average annual price rise of nearly £85. Customers in different areas of the country face different price rises. Those in the West Midlands and southern Scotland face the biggest increase.
British Gas said it had to lift prices following a rise in the cost of producing energy – including wholesale costs.
The company pointed to a similar decision by energy regulator Ofgem, which recently blamed wholesale costs for the rise in the default tariff for those with prepayment meters.
Mark Hodges, chief executive of Centrica Consumer, of which British Gas is a part, said: “We fully understand that any price increase adds extra pressure on customers’ household bills. This increase we are announcing today is reflective of the costs we are seeing which are beyond our control.”
He also blamed the extra charges it faced as part of government policy, such as the introduction of smart meters and emissions targets.
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