British Gas announced today that it will increase gas and electricity prices for domestic customers by 15 per cent. The move will add over £130 per year to the average energy bill.

British Gas, the UK's largest energy provider, is the third major supplier to increase prices in the last two weeks. Both EDF and npower started the year with double digit increases, affecting almost 10 million customers.

British Gas, which supplies over 13 million customers and is the UK's largest energy provider, said that it could make a loss in 2008 unless it took action on prices.

Blaming higher wholesale energy costs, managing director Phil Bentley said the firm couldn't be expected to absorb the "burden" of these increases. He also said that British Gas wanted lower gas prices but "lower availability of supplies from both the UK and the Continent, coupled with higher global oil prices, have forced up wholesale prices."

However, Energywatch chief Allan Asher said he was "sick and tired of hearing energy companies try to justify the latest bout of pain they are inflicting on their customers".

Dual fuel customers can expect their bills to go up by £143 to £1,055, and customers paying by direct debit can expect an increase of £131, bringing annual bills up to £968.

There is some good news though. Customers on the Click Energy 4 tariff, British Gas's cheapest offering, will not be affected. The internet only tariff, which is the cheapest available in most regions, is still available for sign up and British Gas standard customers can switch to Click Energy 4 and bypass the increases altogether.