Struggling householders were dealt a fresh blow today as Scottish Gas announced gas prices are to rise by 35% with a 9% rise for electricity.
The price hikes come into effect immediately and will add an extra £262.80 a year (25%) to the average dual fuel customer's bill, or 72p a day.
The company blamed increasing global demand, diminishing UK gas reserves and record oil prices for the decision.
But it said standard rate customers will not be hit with any further prices rises this year, while 2.1 million of its fixed-rate customers will not pay any extra at all.
The news comes just days after after 100,000 Scottish households were faced with a £200 rise in their annual gas and electricity bills after EDF Energy announced its second inflation-busting price increase this year.
EDF Energy yesterday said that typical customers on a dual fuel tariff would pay £3.97 a week more for their energy with immediate effect following a 17per cent rise in electricity charges and a 22per cent increase for gas.
In May Scottish Gas owner Centrica warned customers to prepare for a major rise in energy bills, but analysts predicting increases around the 15per cent mark.
In January Centrica announced a 15per cent average price increase for gas and electricity, which pushed an average annual bill for gas and electricity from £912 to £1051.
"We very much regret that we have had to make this decision at a time when many household budgets are already under pressure," said British Gas managing director Phil Bentley.
"The simple fact though is that we have entered an era of unprecedented high world energy prices."
The average dual fuel customer was paying £912 in annual bills at the beginning of 2008, but following the two price hikes this has jumped by more than £400 to £1,317, the company said.
But British Gas added that it was currently running at a loss as it struggles to cope with an extra £2 billion in costs. Wholesale gas prices for the coming winter were 89% ahead of last year, it said.
Mr Bentley added: "We're working hard to take costs out of the business and are on target to save £60 million this year, but we can't absorb the impact of such high wholesale prices."
The higher prices have wiped more than two-thirds off its profits for the first half of the year, which fell by 69% to £166 million.
This compares with the bonanza £533 million seen last year when British Gas waited before passing on previous falls in wholesale energy costs.
The firm added that higher transport and distribution costs as well the price of meeting Government targets on renewable energy generation and reducing carbon emissions accounted for a £32 rise in bills.
But the group sought to allay mounting fears over fuel poverty by delaying the price hikes for 340,000 customers on its Essentials tariff until next April, saving up to £214 per customer.
It also plans to spend £900 million installing energy efficient products in customers' homes over the next three years.
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