CHARITIES and consumer watchdogs have condemned a decision by British Gas to raise its fuel prices by nearly a fifth.

Yesterday, the energy company announced that the price of gas will rise by 18 per cent and electricity by 16 per cent from August.

The announcement follow a similar price hike by Scottish Power last month and other energy companies are expected to follow suit.

Some of British Gas's customers could see their bills rise by as much as 24 per cent depending on how they pay their bills and where they live. The minimum increase will be 12 per cent.

British Gas has blamed the increase on rising global energy prices, which have risen by 30 per cent since last winter.

It said its customers could benefit from free loft and wall cavity insulation, free energy use monitoring, and flexible payment terms.

British Gas managing director Phil Bentley said: "We know there is never a good time to raise prices, but we are buying in a global energy market and have to pay the market rate."

Mike O'Connor, chief executive of Consumer Focus, said wholesale prices have gone up but are still a third lower than their peak in 2008.

He has calculated that in this time British Gas prices have risen by around 44 per cent on gas and 21 per cent on electricity and suppliers have made healthy profits.

He added: "This price rise will send a shockwave across the country. The impact on customers will be severe, piling more pressure on severely stretched household budgets and pushing hundreds of thousands more households into fuel poverty.

"Consumers simply don't trust that energy companies have customers interests at heart and rightly question whether prices are fair."

Andrea Hewitt of Age UK Darlington said: "We are very concerned about today's reports as rising energy prices would tip 250,000 more pensioners into fuel poverty.

"High energy prices worsen the problem of fuel poverty which contributes to an average 25,500 excess winter deaths among older people every year in England and Wales."

Energy regulator Ofgem has called for the industry to be overhauled after it found the big six companies were putting prices up more quickly than they reduced them when prices fell.

A spokeswoman for npower said: "Increases in wholesale energy prices and the costs of new Government legislation mean that we cannot rule out future price increases."