The announcement followed increases from rival Npower, which raised its electricity British Council to rebuff Russia ...
UK troops set for Basra handover ...
Russia suspends British Council ... prices by 12.7% and gas by 17.2% earlier this month.

EDF Energy also put up its electricity tariffs by 7.9% and gas bills by 12.9% this week.

British Gas said that rising wholesale prices meant that without this price hike it would make a loss this year.

'Higher transport costs'

"In the last six months of 2007, higher wholesale gas prices have reduced British Gas operating margins to around 1%, and at current wholesale prices would be loss making in 2008 without the increase," its owner Centrica said in a statement.

It also blamed rises in the price it has to pay to transport and distribute energy, as well as the cost of meeting the government's targets for the use of renewable energy sources and reducing carbon emissions.

The 2.4 million British Gas customers on fixed-price tariffs will not be affected.

The statement added that 340,000 vulnerable customers on its Essentials tariffs will have the price increase delayed until the end of the winter.

Attracting customers

It is also offering free insulation to any UK home owned by somebody over the age of 70.

The news comes after a year in which British Gas has had some success in attracting back customers who had joined other suppliers.

It cut its tariffs in March 2007 and then again the following month to reflect falling wholesale energy prices.

Are you a British Gas customer? What's your reaction to this news? Send us your comments by filling out the form below.

(BBC)

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