British Gas hints at price rises

The firm's owner Centrica states in its interim report that wholesale gas and electricity prices (the price companies pay for energy) are around 25% higher than at the same time last year.

Consumers could therefore feel the full force of hikes if the energy giant passes on these costs, which it has suggested it may do.

The report states: "Forward wholesale prices of gas and power for delivery in winter 2011/12 are currently around 25% higher than prices last winter, with end-user prices yet to reflect this higher wholesale market price environment."

Any rise would be the second in less than a year, which would add to households' already spiraling costs.

British Gas last increased its gas and electricity prices in December last year by an average of 7%.

In fact, the big six suppliers brought in average price rises of 5.9% last winter, adding £62 to the average bill.

Worryingly, two smaller providers, First Utility and Ovo, have recently announced plans to hike prices, fuelling comparison site Energyhelpline's predictions that there could be energy price hikes of up to 15% this summer (see the Energy prices predicted to rise news story).

MoneySavingExpert.com creator Martin Lewis says: "We have seen this before from British Gas, it's effectively signalling that we are likely to see another price rise soon, and these energy companies are like sheep; where one leads expect the others to follow.

"This announcement fits in well with the predictions that have been around for a while.

"Because of the risk I would urgently suggest anyone who has not done a comparison in the last six months should do one now while we still have a level playing field.

"They should also consider locking into a cheap fixed rate if a hike in prices is unaffordable."

Price hikes

Existing Ovo Energy customers on a variable tariff face increases of 12% on their average dual fuel cost from 9 June. This follows the company's last price hike on 10 February. This will hit roughly 5,000 customers.

First Utility also increased prices in April and May by up to 40%.

Many of the major suppliers have also scrapped their top deals over recent weeks.

British Gas pulled what was its cheapest deal, WebSaver 11, at £895 a year for the typical customer on Friday. It has been replaced by WebSaver 11 + One Off Repairs, which costs £931 a year for the average customer.