'Shop around' advice after a record gas rise

Millions of British Gas customers are being urged to consider switching supplier for a better deal following a record price rise.

The company said gas bills would soar by 12.4 per cent and electricity by 9.4 per cent to compensate for higher wholesale prices. The rise is the second of the year by British Gas, which imposed a 5.9 per cent increase in January.

Critics attacked the scale of the increases and warned that vulnerable customers would be hit hard.

Jennifer Evans, from price comparison website uSwitch.com, urged the

18.4 million customers with British Gas accounts to consider changing their supplier. She added: "We have already seen a couple of other suppliers implement their second price rise of the year, but when British Gas announces an increase the rest normally follow suit."

The increases mean gas customers will see their bills rise by almost one fifth in less than a year. Analysts say the latest increase, to take effect from 20 September, will add ?99 to the annual bill for a family of four which buys both gas and electricity from British Gas. Medium-use dual-fuel customers, such as a couple in a three-bedroom house, will face a rise of £74 a year, according to uSwitch.com.

British Gas said the increases, its highest since the market was opened to competition in the mid-Nineties, were due to record wholesale gas prices caused by the depletion of North and Irish Sea gas reserves.

Managing director Mark Clare added: "The era of cheap UK energy is over but we have confidence that the investments we are making in future energy supplies will, in the long term, put downward pressure on commodity costs for the benefit of all our customers."

The company has pledged £10million to set up a fund to help customers who need help paying their bills.

Allan Asher, of fuel watchdog Energywatch, said: "Overall this is seriously bad news for millions of consumers."