British Gas has claimed that the increases of wholesale gas and electricity left them with no choice but to substantially increase their prices.

The company today became the third major energy supplier to make significant price increases as they announced a 15 per cent hike.

New tariffs are set to take effect immediately with the company blaming both distribution costs and the increase in wholesale prices, the Times report.

The company claimed that it had been forced to take action on account of its operating margins on gas “thinning” to one per cent in the last six months.

Phil Bentley, BG’s managing director, comments: “We can’t absorb the burden of these higher energy prices and the costs of delivering a cleaner environment.”

Although not unexpected news, the announcement is likely to anger consumer groups, reports the Times.

British Gas said that it would put the increase on hold until the spring for 340,000 elderly and vulnerable customers.

The energy regulator Ofgem recently assured the Chancellor Alistair Darling that Britain’s competitive energy market is working.

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