The 17.3 million consumers who buy gas and electricity from British Gas, the country’s biggest energy supplier, face a 14.2 per cent from September 19, it emerged last night.

This represents the biggest single increase from any company this year and will take the average bill for a dual-fuel user to £754 a year, an increase of £96, adding to the inflationary worries facing Gordon Brown. The overall bill forhouseholds will rise by £1 billion in the coming year after 18 months of rising prices that have cost the average consumer £300 in the past year.

Gas and electricity bills rose by 15.4 per per cent in the year to July 2005, far faster than the overall 2.3 per cent August inflation rate on the consumer price index.

Petrol has risen by 14.5 per cent over the same period. The average price a year ago was 81.75p per litre; now it is 95.57p per litre and some filling stations are charging £1 a litre. The average household bill for petrol has risen by £182 a year.

The average rise for gas and electricity is £116 per household, bringing the total fuel rise to nearly £300.

The Chancellor has delivered several warnings about the impact of rising oil prices on economic growth and intends to hammer the message home in the coming days.

As The Times disclosed yesterday, he will again freeze the 1.2p a litre rise in fuel duty that has been deferred since the March Budget.

Since 2004 British Gas has imposed total rises of 35 per cent on gas and 32.4 per cent on electricity. Prices rose twice last year, causing more than a million customers to change supplier. The company said that it had been forced to raise prices because of the soaring cost of gas on the wholesale market and record oil prices, which have been forced even higher by Hurricane Katrina.

British Gas said that it would offer a rebate of up to £60 to a quarter of a million pensioners and vulnerable customers. Mark Clare, its managing director, said: “We are no longer an energy island — spiralling world oil prices are having an unprecedented impact on the cost of gas.”

The rises come amid increased fears that Britain’s electricity and gas supply could be stretched to the limit this winter. A Department of Trade and Industry report on energy supplies in July said that because of “anticipated tightness”, gas would be available to “most consumers under all reasonable scenarios”.

Companies such as ICI and Pilkington and brickmakers are understood to be in talks with suppliers over emergency measures to protect supplies for households.

“There is a greater risk of interruptions to supply happening than at any time in recent years,” Jeremy Nicholson, chairman of the Intensive Energy Users group, said. “The protection of households is the priority if we end up in an emergency and supplies have be cut off.”

Many industrial customers have interruptible supply contracts for electricity, and similar contracts for gas are now being discussion.

Britain will become a net importer of gas, rather than an exporter, in the next two years because of the decline in North Sea gas production. New pipelines and storage facilities are being built to bring more supplies into Britain but there are fears during this coming winter and the next that gas volumes will fall to critical levels with increased demand.

Unions and consumer groups criticised British Gas’s price rise, which follows similar increases by EDF and Powergen. Allan Asher, chief executive of Energywatch, the consumer watchdog, said: “The wage rise for the average person comes nowhere near the latest increase. What we face is not just an ineffective energy market but one that, for the consumer, is broken,” he said.

He called for “meaningful reform” of the British energy market, a sentiment echoed by the GMB union, which said that there was a real threat of electricity shortages, and that the Government needed to put control and stability back into the energy markets.

David Willetts, the Conservative trade and industry spokesman, said that the soaring price of gas underlined how limited liberalisation in continental gas markets was hitting consumers.

“For gas prices to come down we need the reform of Europe’s gas markets. The Government hasn’t bothered during the European Union presidency and now gas prices have gone up again,” he said.

Vince Cable, for the Liberal Democrats, urged Ofgem, the energy markets regulator, to ensure that the increases were genuinely justified.

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