The £100-a-month fuel bill is to become a reality for millions more families after record energy price rises were announced yesterday.

The increases of up to 44 per cent for ten million British Gas customers were branded “indecent” last night as MPs stepped up the pressure for a windfall tax on energy companies.

The biggest rises will hit families in London, the Midlands and southern England as the company, which is expected to announce multimillion-pound profits today, introduces a new regional pricing structure.

Gas bills rise by an average of 35 per cent and electricity by 9 per cent, pushing the annual energy bill for a British Gas dual-fuel customer up £263 to £1,314, a rise of 25 per cent.

MPs and campaigners said that British Gas was being greedy. “These rises are indecent,” said Lindsay Hoyle, a member of the Commons Business and Enterprise Committee. “If anything underlines the urgent need for a windfall tax on greedy energy companies, it’s rises like these.”

The company made a profit of £571 million last year. Its embarrassment is likely to worsen after it emerged that the wholesale gas price collapsed a day before its announcement.

The bill increases are expected to add a million households to the 4.5 million already facing fuel poverty – defined as having to spend more than 10 per cent of income on energy.

The country’s four other main power suppliers – ScottishPower, E.ON, npower and Scottish and Southern Energy – are expected to announce their own increases within days. Centrica, the owner of British Gas, said that it had taken the step because it was being forced to pay an extra £2 billion this year to meet the soaring wholesale cost of gas, which it said had risen 89 per cent over the past year.

British Gas can expect to pay less for its fuel in the short term, however, because the price of gas for delivery the following day has plummeted. It decreased by almost 50 per cent on Tuesday on the back of falling oil prices and weakening demand.

The firm’s announcement, which follows a similar rise by EDF last Friday, will add to the economic misery for millions of people struggling with spiralling bills for mortgages, food, council tax and insurance.

Phil Bentley, the managing director of British Gas, said that he regretted the increase but the business was operating “at a significant loss” and would otherwise dip hundreds of millions of pounds into the red.

Mark Todd, of energyhelpline.com, called it the “biggest energy price rise in history”, a claim that Centrica did not deny. Gordon Lishman, of Age Concern, said that the increases were a “hammer blow” for vulnerable groups such as the elderly.

Charles Hendry, the Shadow Energy Minister, said that people faced a desperate winter. “These increases will come as a shock to every home in the country. Britain is being hit especially hard as the Government has utterly failed to prepare for rising fuel prices during the years of relatively low bills.”

Nick Clegg, the Liberal Democrat leader, said the rises were unacceptable. “Energy companies are benefiting from a £9 billion windfall yet continue to hike up their prices on the Government’s watch.”

The consumer group Energywatch blamed the rises on a lack of competition in Britain’s energy market, but Mr Bentley pointed to global factors. “The simple fact is that we have entered an era of unprecedented high world energy prices. We can’t absorb the impact of such high wholesale prices.”

For the first six months of the year British Gas profits fell 69 per cent to £166 million against £533 million for the first half of 2007. Centrica blamed rising wholesale gas prices, linked to the price of oil, on the depletion of North Sea supplies. Britain will import 40 per cent of its gas this year, up from 27 per cent last year. The figure is expected to hit 75 per cent by 2015.

British Gas, the country’s biggest energy supplier, has ten million gas and six million electricity customers. About 2.7 million will be unaffected by the rises because they are either locked into fixed-rate contracts or are one of 340,000 vulnerable customers whose prices have been frozen until 2009.

Money Central: 10 tips to beat the energy price hike

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