BRITISH Gas has been toppled as the cheapest provider for energy after increasing rates on its Click Energy 4 tariff by a hefty 18.5%.

The tariff, which until last Friday was the cheapest available online, is now the second most expensive internet product. The average Click Energy 4 dual-fuel bill now costs £880 – a £138 annual increase.

The supplier had protected Click Energy 4 customers from its 15% price increase on standard deals in January.

While Click customers saw their annual bills stay steady at £742 – the price it has been since October last year – most British Gas customers saw their bills shoot up to over £1,000.

Tim Wolfenden, energy expert at comparison firm Uswitch said: “Eyebrows were raised by the significant price gap between online and standard customers. Many believed it was discriminatory and difficult to justify.”

New customers signing up to Click Energy will be put on to version 5 which also costs £880 a year for dual fuel.

The cheapest online deal is now offered by Eon with a rate of £769 a year for dual-fuel customers.

The news comes amid concern that British consumers are being hit by bigger price increases than their European counterparts at the hands of the continental energy giants.

Germany’s Eon, which serves 8m customers in Britain, last week raised standard gas rates by 15% and electricity by 9.7% – up to three times more than its increases in Germany.

Up to 4m UK customers on Eon’s standard deals will be affected, with the rest on fixed tariffs. Customers on dual-fuel deals with paper billing will see their costs go up from an annual average of £913 to £1,063.

Eon cited wholesale energy rises of 60% over the past 12 months. However, it has raised German gas bills by only 4.4% since October, while electricity rates remain unchanged in most regions, according to Energy Advice, a market analyst.

Npower, Scottish Power and EDF, owned by German, Spanish and French firms respectively, have also raised UK prices by about 15% this year, but only by 4%-7% on the Continent.

This has led to accusations that firms are overcharging UK households while protecting customers in their home countries. Adam Scorer of the consumer watchdog Energywatch said: “It seems undeniable that powerful European gas producers treat Britain’s open energy market as a treasure island to be plundered for cheap gas when the price is low and then fleeced with punitive prices when demand grows.”

According to a YouGov poll last month, 89% of consumers feel they are being ripped off by energy companies. Since 2003, gas bills have increased by 86% and electricity bills by 64%.

Scottish and Southern Energy, based in Scotland, has promised not to change rates until April. It is the cheapest for standard tariffs charging on average £875.

Eon has launched a price guarantee tariff, which promises to be below British Gas’s standard deal until June 2009. It is currently charged at £945 a year for dual-fuel customers paying by monthly direct debit.

The cheapest capped deal is offered by EDF, fixed until the end of July 2010. The average dual fuel tariff costs £963. However, analysts warn that wholesale costs have started to come down again – although not significantly.