Energy provide E.On is to increase gas prices by 26 per cent and electricity prices by 16 per cent from tomorrow for its eight million customers
The E.On price hikes will see bills rise 62p a day or by 22 per cent for the average dual fuel energy customer.
The average household bill for a dual fuel E.On customer was £913 on January 1st 2008, £1,063 in July and will now go up to £1,297 - an increase of 42 per cent.
However, the firm maintains it offers better value than British Gas and its customers on fixed-price tariffs will not be affected.
The price hikes follow those made by British Gas and EDF and expected to be followed by the remaining three major energy firms.
Graham Bartlett, E.ON retail managing director, said: "I'm very aware of the effect that today's announcement will have on our customers and I recognise that this is a very tough time for everyone.
"This was not an easy decision to make and we've tried to keep these increases as low as possible while protecting as many of our customers as we can."
The price hikes have been blamed on a 51 per cent rise in wholesale costs since February.
E.On has also provided a boost for pre-payment meter customers with the pledge their energy bills will be charged at the same rate as standard customers.
Consumers facing rising energy bills are being advised to shop around for new deals especially those who have never changed energy providers and opt for direct debit payments on dual fuel deals.
Ann Robinson, director of consumer policy at uSwitch.com, said: Soaring energy bills pose a huge threat to our standard of living gas and electricity are essential commodities which have now become a luxury that many can no longer afford.
"Consumers are going to have to adjust quickly and there are two key steps to this making sure we pay the lowest possible price for our energy and learning to use less of it.
"I would also urge people to contact their suppliers to find out what help they can get towards making their home more energy efficient we are all paying an extra £39 a year on our bills towards suppliers energy efficiency schemes so why not try to get something back?
In February E.On raised is gas and electricity prices by 15 per cent and 9.7 per cent respectively.
German-owned E.ON was formerly known as Powergen, which was spawned out of the privatisation of the Central Electricity Generating Board (CEGB) in 1990.