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British Gas Customers Hit By Price Hike

(c) Sky News 2012

Around 8.5 million households are being hit with a 6% rise in their energy bills as British Gas becomes the latest utility giant to hike its tariffs.

The move is estimated to add another £80 to the typical annual dual-fuel bill for a British Gas customer, or £1.50 a week.

The price increase is more than double the rate of inflation.

It was first announced last month but has sparked renewed anger after British Gas parent company Centrica (Xetra: A0DK6K - news) revealed it was set to make profits of £1.4bn this year.

Experts also predict around £575m of pre-tax profit from its British Gas residential arm after gas consumption for the first 10 months of 2012 rose 9% because of colder than normal weather.

Mike Jeram, head of business and environment at trade union Unison (KOSDAQ: 018000.KQ - news) , said: "The billion pound profits of energy companies, announced at the same time as massive price hikes for their customers, are an insult to the many families who are struggling to get by as winter takes hold."

Audrey Gallacher, director of energy at Consumer Focus, called for rules forcing energy firms to tell customers about the link between bill rises and profits.

She (SNP: ^SHEY - news) said: "Consumers will be sceptical over supplier profits, given questions over how justified recent price rises have been."

British Gas's bill increase comes amid a spate of tariff rises among the UK's "big six" power firms.

SSE (Xetra: A0RFBG - news) was the first to increase prices, lifting bills by an average of 9% in mid-October, affecting about five million electricity customers and 3.4 million gas customers.

Npower follows with its increase on November (Xetra: A0Z24E - news) 26, while EDF (Paris: FR0010242511 - news) and Scottish Power will raise bills in December.

German-owned E.ON has denied reports it is planning to announce an 11% tariff rise next month.

A spokesperson told Sky News: "We have promised not to raise prices in 2012 and are continuing to offer customers long-term certainty by offering fixed-price products and helping the get on the best deal for them."

The firms have all blamed rising wholesale prices, which they say is out of their control, but the sector has been embroiled in controversy this week after accusations of alleged wholesale gas price-rigging.

One supplier, Co-operative Energy (NYSEArca: JJE - news) , has bucked the trend by announcing it will reduce its electricity charges by 2% from December 21.

Co-operative Energy, which supplies 60,000 households following its launch 18 months ago, said the move reflected lower wholesale electricity costs.

Regulators are investigating claims made by a whistleblower to the Financial Services Authority (FSA) and energy watchdog Ofgem of alleged gas price manipulation on September 28.

All six of the big energy companies have released statements denying any involvement in attempts to fix the £300bn market.

Centrica said an internal investigation "found nothing unusual" in its wholesale gas trading activities on the day when price manipulation was alleged to have taken place.

The group, which makes most of its profit from upstream gas and oil exploration, is expected to see a 6% profits improvement in its residential energy supply, driven by stronger trading over the first half of the year, with the figure forecast to be lower for the second half of the period.

Its (Euronext: ALITS.NX - news) trading update comes after rival SSE reported a 38% jump in half-year profits to nearly £400m.

Centrica said competition in its division which supplies small and medium-sized businesses had cost it 43,000 customers since June.