Power bills rose for four million households today, after npower, the UK's fourth biggest energy supplier, increased the cost of gas by 17.2 per cent and electricity by 12.7 per cent.

The move, which will add £95 a year to gas bills and £64 to electricity, comes shortly after temperatures around the UK plummeted, and the cost of oil soared to $100 a barrel. It raises the prospect of fuel poverty for millions of pensioners and others already facing rising costs for food, petrol and other essentials as well as deteriorating conditions in the credit and housing markets.

Analysts believe that further price rises are on the way from other suppliers. E.On, the owner of Powergen, is reportedly considering putting up prices early next week.

Karl Brookes, spokesman for energywatch, the independent gas and electricity watchdog, said: “If this is the shape of things to come over the next few months we are going to see hundreds of thousands of consumers wonder how they can afford to keep their homes warm. Npower has shown its colours with enormous price increases - energywatch calls on other suppliers to respond to current high wholesale prices by competing over the long term with good value products, and not to simply load the risk of wholesale prices on their own customers.”

Npower is the first energy supplier to put up its mainstream standard tariffs. There was a flurry of price cuts last spring when wholesale gas prices eased but British Gas, which is owned by Centrica, and npower put up prices last month in their niche tracker tariffs, which closely follow market prices for gas and power.

British household energy bills last rose sharply in 2006, when a shortage of gas supplies to the British market caused a price spike.

Prices fell back last year. Centrica had given warning that the energy industry was facing a “difficult environment” this year, a hint that prices were to rise.

Andrew Horstead, head of energy research at the consultancy Utilyx, said that rising wholesale gas prices had increased the pressure on power suppliers to lift prices.

Between February and December last year, annual forward gas prices for this year rose by 42 per cent from 33p a therm to 47p a therm: roughly 10p more than industry forecasts. Spot prices rose by 55 per cent over the past year to about 42p a therm from 27p.

Gas prices are frequently linked to oil prices, which breached a record $100 a barrel on Wednesday evening and was trading just above that figure at one point yesterday.