Huge rise in British Gas fuel bills

British Gas delivered a blow to 7.8 million households as it confirmed a 10.4% rise in electricity prices and 8.4% hike for gas tariffs from next month.

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General view of British Gas logo.

The Centrica-owned energy giant said average customer dual-fuel bills will rise by £123 to £1,444 a year according to Ofgem usage figures after the price increases, which take effect on November 23.

The group is the second of the "big six" providers to increase tariffs after SSE recently announced an 8.2% rise from November 15.

Regional variations mean some Scottish customers will see prices rise on average by as much as 11.2%, while those in London will suffer a 10.6% increase and households in Yorkshire will have a 10.5% lift.

The move comes despite a pledge by British Gas earlier this year to use an annual earnings windfall from the cold weather to keep a lid on tariffs.

British Gas hiked tariffs by 6% last November ahead of a bitterly cold period when gas consumption rose 18% in the first four months of this year compared to 2012 - helping earnings at its residential arm to rise 3.2% to £356 million for the first half of the year.

The company said in May that because of the economic pressures facing many customers, the board had decided that any benefit from the exceptionally cold weather would be used to maintain ''price competitiveness''.

Today it blamed the hike on the increasing cost of wholesale energy prices, Government energy initiatives and higher network charges for delivering power to customers' homes.

Ian Peters, managing director of British Gas Residential Energy, said: " We haven't taken this decision lightly, but what's pushing up energy prices at the moment are costs that are not all directly under our control, such as the global price of energy, charges that we have to pay for using the national grid that delivers energy to the home, and the cost of the Government's social and environmental programmes."

The group is also introducing a new fixed standard charge of 26p a day for all customers - which will impact another 6.1 million - and a single variable unit rate, depending on usage and tariff.

Consumer groups warned other providers are set to follow suit with price rises, leaving some households to choose between "heating and eating".

Martin Lewis of MoneySavingExpert.com said: "This price hike round is big, and is nasty.

"It also means that two of the big six sheep have bleated, the rest are likely to follow within the next six weeks, leaving millions more homes already under the cosh having to choose between heating and eating."

Energy Secretary Ed Davey said unhappy British Gas customers should quit the firm and buy their gas and electricity elsewhere.

He added: "This is extremely disappointing news for British Gas's customers and the company will need to justify this decision openly and transparently."