British Gas has announced plans to increase prices for gas and electricity by 15%. The announcement by the firm, the UK's biggest power provider, followed the announcement of price increases by rival companies Npower and EDF Energy.

The price hikes, which will affect the company's 16 million customers will come into effect immediately. However, around 2.4 million customers on fixed-term tariffs will not be affected by the increase and British Gas owner Centrica confirmed that the 340,000 vulnerable customers on the company's Essentials tariff will have the increase delayed until winter is over.

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Centrica said that British Gas would be loss-making this year without the introduction of the price increase, blaming rises in the costs of transport and distribution of energy for the rise, as well as the cost of meeting government targets on the use of renewable energy sources and the reduction of carbon emissions.

EDF Energy announced that it was increasing electricity prices by 7.9% and gas prices by 12:9% earlier this week, while two weeks Npower announced that electricity prices would increase by 12.7% and gas prices by 17.2%.

(KMcA)