In a bid to cope with mounting financial losses at its British Gas operation, Centrica has moved to increase prices for customers for the second time in 2006 and the third time in 12 months.

British Gas retail customers will see their gas bill rise by some 12.4% in September, as earlier media reports had predicted. Centrica says its British Gas arm made a record GBP143 million loss in H1 2006 – up from GBP75 million in H2 2005.

The company’s electricity customers will also see their bills going up, by some 9.4% also from September.

Mark Clare, the outgoing managing director of British Gas, said: This winter is crunch time for the wholesale cost of gas. As a result of the investments and commitments we have made we can see some light at the end of the tunnel but it’s still a winter away. During 2007/08 we should see new infrastructure coming on stream putting downward pressure on wholesale energy costs.

The company has for a long time sought to benefit from its status as the former state gas monopoly by charging more for gas to its large customer base, on the premise that a sizeable rump of these ‘tier one’ customers would not switch. It offers electricity at a more competitive rate to gain share form the former regional power companies.

However with British Gas receiving another barrage of bad publicity and, as seems likely, a resultant bout of customers switching away, Centrica hopes increased investment in supply infrastructure and continued lobbying for greater transparency in the wholesale market will soon bear fruit. The company is legally forbidden from cross-subsidizing British Gas from its upstream business however.