UK Markets open in 4 hrs 2 mins

British Gas increases dual fuel bills by 5.5% hitting 4 million customers

British Gas is hitting customers will a hefty rise (Getty Images)

British Gas is raising dual fuel bills by 5.5% hitting an estimated 4.1 million customers with a £60 a year hike.

The energy giant blamed the move on rising wholesale prices and policy costs.

The price of the British Gas standard variable tariff will climb by £60 to £1,161, an average 5.5% rise for a typical dual fuel customer.

MORE: 5 million poorest households face 5.5% energy bills rise – after watchdog changes tariffs

Mark Hodges, chief executive, Centrica Consumer, said: “We fully understand that any price increase adds extra pressure on customers’ household bills.

“This increase we are announcing today is reflective of the costs we are seeing which are beyond our control.”

About 4.1m households will be hit by higher bills because of the move by British Gas (REUTERS/Darren Staples)

The increase is due to take effect from May 29 and the company pointed out that regulator Ofgem was forced into a similar move for those people with prepayment meters.

British Gas is the domestic arm of Centrica and Hodges said government policy, such as smart meters and moves to tackle carbon emissions, were hitting the sector.

Other policies, including energy price caps for standard variable tariffs, could also yet add to supplier costs.

MORE: How will Theresa May’s energy price cap plan help 11m British households?

Household usually default onto SVTs once their fixed deal ends – and SVTs are usually more expensive than other deals they can get by switching.

Hodges said: “Government policies, intended to transform the energy system, are important but they are putting pressure on customers’ bills. We believe government should level the playing field so the customers of all suppliers pay a fair share of energy policy costs.

“We continue to encourage government to consider moving these costs out of energy bills altogether and into general taxation.”

The move by British Gas, the UK’s largest energy supplier, will likely herald similar increases by its rivals in the coming weeks.