Customers who rushed back to British Gas after its price cuts earlier this year are likely to be stung by increases in the new year after its parent company, Centrica, gave the clearest signal yet that energy bills are on their way up again.

In a trading update, Centrica told the City that rising wholesale gas prices were creating a “difficult” environment for suppliers in the energy market.

Centrica said: “Looking forward, the high wholesale prices will, if sustained, create a more difficult environment for retail energy suppliers in the UK going into 2008. We will continue to monitor this with regard to future pricing policy.”

British Gas, the UK’s biggest gas supplier, has been steadily losing customers for the past decade. But 250,000 customers returned to the company this year after it became the first supplier to pass on price cuts of up to 20 per cent.

For the first time last year, Centrica supplied less than half of the UK’s total market. Yesterday, however, it confirmed that it was now back supplying 16 million customers.

Since February, annual forward gas prices for 2008 have risen 42 per cent, from 33p a therm to 47p a therm – about 10p more than industry forecasts. Spot prices have risen 55 per cent over the past year, to about 42p a therm, from 27p.

Centrica said that the problem is that sharply rising gas prices have reduced margins in the company's residential gas and electricity supply business in the second half.

The high prices are also affecting Centrica’s business-to-business operation, which supplies industrial and commercial customers with energy. Centrica said that the operation made a loss in the final quarter of the year and that the situation is likely to worsen in 2008, given forward gas prices.

Centrica’s power generation division, which supplies about 20 per cent of British Gas’s needs, is expected to break even in the second half because-of lower spark spreads – the difference between the cost of gas needed to fuel power stations and the price that electricity fetches in the market - and higher levels of plant outages.

Wholesale gas prices have been driven higher by soaring oil costs, a colder start to the winter than last year and European players being able to buy supplies in a more liberalised UK market.

Despite the rising gas price, Centrica’s overall pretax profits will be in line with market expectations of a record £2 billion for 2007, its trading statement said.

The UK’s leading energy suppliers are all poised to follow British Gas’s lead. npower, the third-biggest supplier, confirmed yesterday that customers following its tracker plan will face increases of 17 per cent for gas and 13 per cent for electricity from January 1 next year. npower’s increases will mean an average £87 more a year on gas bills and a £44 annual rise for electricity bills for tracker plan customers.The increases to the tracker rate are significant because they give an indication of how much standard tariffs are likely to rise.

Analysts said that it now looked increasingly likely that standard tariffs would have to rise by 15 per cent, which would mean consumers having on average to pay an extra £137 a year.

Times Recommends

• Brown targets fat cats after nationalising banks
• US shares soar on global banking rescue
• Europe follows Brown to head off meltdown