Londoners being hit by highest energy bill rises

Londoners have been hit by gas and electricity price rises up to double those in other parts of Britain, according to a regional breakdown.

The average annual London energy bill will go up by £200 to £1,035.

A spokesman for consumer group Energywatch said: "The capital is getting hammered. It has had the highest rises for both gas and electricity."

The discrepancy came to light after price increases were announced by energy giant npower last week.

Its gas tarrif for direct debit customers in London went up by 23.8 per cent. This compares with a national average of 17.2 per cent and 15.1 per cent in the Manchester area and Wales.

It is the first time any gas company has imposed variable increases for different parts of the country.

Npower also lifted its electricity prices by 21.1 per cent in London, compared with a 12.7 per cent national average and 9.7 per cent in Wales.

The company, owned by the German utility giant RWE, supplies 281,000 households in the London region.

British Gas, the country's biggest energy company, is thought likely to follow suit, possibly this week, although insiders said today that no final decision has been taken.

A spokesman for npower, headed by £780,000-a-year chief executive Andrew Duff, said Londoners were hit hardest because of the cost of repairing and maintaining gas pipelines in the capital.

He said: "Around £50 of the increase comes directly from infrastructure because the gas distribution companies are charging us an extra £50 per customer."

But some industry experts were sceptical. Tim Wolfenden, head of home services at online comparison website uSwitch.com, said: "I hope npower are not trying to pull the wool over Londoners' eyes. We don't think the (gas distribution) costs should be varying massively region by region."

Most of the tarrif rise is due to dearer wholesale gas and electricity prices, which have soared by 60 and 65 per cent respectively since last February.

Npower's move is the first tarrif increase by a major energy supplier since 2006. Last year prices fell after new pipelines made it easier to import gas from the Continent.

Political pressure is growing on the energy companies. Chancellor Alistair Darling has written to energy regulator Ofgem demanding a meeting with its chief executive Alistair Buchanan.

He wrote: "I would be particularly interested in your views on the relationship between wholesale price movements and feed-through to domestic retail prices."

Energy price rises feed straight through to the inflation rate and may force the Bank of England to delay cutting interest rates.