British Gas has announced that soaring wholesale energy prices have forced it to increase tariffs for domestic gas and electricity, despite its parent group Centrica reporting a massive £992 million profit to 30 June.

Although it is a 19% drop on last year, British Gas is blaming wholesale gas prices increasing by 89% on the previous winter. Wholesale electricity prices have also increased by 72% over the same period.

British Gas Managing Director, Phil Bentley, said: "We very much regret that we have had to make this decision at a time when many household budgets are already under pressure. The simple fact though, is that we have entered an era of unprecedented high world energy prices. The only answer to cope with higher energy prices, I'm afraid, is for all of us to be more energy efficient and we will be contacting all our British Gas customers to show how they can save energy to try and offset these price rises."

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The retail price increases, averaging 25% or 72p per day for a dual fuel customer, will come in with immediate effect.

Commenting on the results Chief Executive of Centrica, Simon Laidlaw said: "We produced a good set of results in tough market conditions and against a record first half in 2007. Through the rest of 2008 and beyond we will continue to concentrate on improving customer service in British Gas, driving inefficiencies out of our entire business, moving in a disciplined manner towards a greater level of vertical integration and pursuing value-adding growth opportunities in all of our businesses."

(CD/JM)