British Gas (BG) has become the latest energy supplier to raise its electricity and gas prices, increasing its retail prices for both by 15 per cent.
Parent firm Centrica said the rise was necessary to avoid BG becoming loss-making in 2008 and blamed higher wholesale prices in the second half of 2007.
"We can't absorb the burden of these higher energy prices and the costs of delivering a cleaner environment," BG managing director Phil Bentley said.
"As Britain's greenest electricity supplier, we are investing in further lowering our carbon emissions. However, this also comes at an increasing cost for all. Ultimately, the best way of reducing energy bills is to make our homes more energy efficient."
The firm, Britain's biggest energy provider, assured the 2.4 million customers on its fixed tariff scheme that they would not see an increase in their energy bills.
It added 340,000 vulnerable customers on the 'essentials' tariff would have the increases delayed.
BG is the third energy supplier to raise its prices in the latest round of price hikes. EDF Energy increased its gas rates by eight per cent earlier in the week after Npower raised its gas tariffs by 17 per cent.
Mark Todd of energyhelpline.com criticised the rise as unjustified, saying BG should have waited until March before introducing the hike.
"Suppliers should do more to protect customers by using their profits to cover recent wholesale price rises," he said.