Centrica's UK residential gas and electricity arm British Gas has become the latest supplier to raise tariffs in the face of sharply rising wholesale costs.

British Gas will raise its domestic gas and electricity fees by 22% from March 1, 2006. The move comes just days after similar announcements from EDF Energy and ScottishPower. The company cited surging wholesale energy costs as the driver behind the increases, and added that the company would continue to shoulder some of the burden of these costs to protect customers.

The cost of buying gas for 2006 is now 63% higher than in 2005 and some 202% higher than 2003, the firm said, and it was quick to draw the parallel with the European Commission’s announcement the day before that it was investigating anti-competitive practices in the energy sector.

Wholesale gas prices in Britain are now the highest in Europe, yet consumers here still pay substantially less than in many European countries including Germany, France and Italy, where prices are also rising sharply, British Gas said in its statement.

The company also gave its dual fuel customers the opportunity to fix their energy prices on a capped tariff offer until April 2009. It is also set to make 300,000 winter fuel payments in 2006/7 for the most vulnerable customers.

The energy map is being redrawn with Britain now dependent on gas imports from Europe – a market the commission says is ‘seriously malfunctioning’. Recent events in Russia have underlined how our energy markets are connected and this has served as a wake up call across Europe.

While there can be no guarantees in such a volatile wholesale market, we see no need for any further price rises this year, assuming the infrastructure is ready to deliver new gas next winter and that proper action is taken following the Commission’s findings, said Mark Clare, British Gas’s managing director.

Energywatch described the news as the bleakest day yet for UK energy consumers.

This is the most serious single event in two years of trauma for energy consumers. British Gas is not only the biggest supplier, it has the greatest number of customers using pre-payment meters and the highest number of customers on the priority service register, who are the most vulnerable consumers, said Allan Asher, chief executive of the consumer body.