BG customers face 15% price hikes

Centrica is to increase gas and electricity tariffs by an average 15% with immediate effect - a move impacting an estimated 13 million British Gas customers.

In doing so, the provider became the third big energy supplier this year to raise standard tariff prices, following rivals EDF and Npower, as the industry passes on soaring wholesale energy and distribution costs.

The announcement will take the average annual dual fuel bill for a BG customer to £1,055, up £143. Those paying by direct debit will see bills go up an average of £131 to £968.

The electricity price rises are subject to regional variation, with customers in Manchester facing hikes of 19% and London households nearly 17%. Parts of Scotland will see 12% rises, as will the Midlands.

This is because British Gas is charged varying amounts by power networks to distribute its electricity.

Centrica, which cut its prices twice last year, said it was unable to carry the "burden" of the rising wholesale energy costs, as much as 61% year on year, and that its residential arm would make a loss this year unless the hikes came into force.

But the UK's second supplier Scottish & Southern Energy, which has 8.5 million customers, said it would hold its bills down until the end of March at least.

BG said 2.4 million customers on fixed-term tariffs lasting up to 2010 would be unaffected by the rises, and that it would also delay them for another 340,000 "vulnerable" customers until the end of winter.

Consumer group energywatch said it was "sick and tired" of hearing about the gas and electricity companies' justifications for price rises, with CEO Allan Asher saying: "It is obvious that this market is not delivering good value to consumers."