Centrica to raise household gas prices 35 percent

By John Bowker

LONDON (Reuters) - British Gas owner Centrica said on Wednesday it would raise gas and electricity prices for households by 35 percent and 9 percent, respectively, citing high wholesale gas prices.

The company, the biggest household supplier in the country with over 16 million customers, said profits at its British Gas Residential unit had fallen 69 percent in the first half, while wholesale prices for the coming winter are up nearly 90 percent on the previous year.

Centrica shares closed up 2.7 percent at 318.75 pence, valuing the business at 11.8 billion pounds. It is the second time this year the company has hiked bills, having announced further double-digit percentage increases in January.

"We very much regret that we have had to make this decision at a time when many household budgets are already under pressure," British Gas Managing Director Phil Bentley said in a statement.

Centrica is the second of the six major suppliers to the market to raise prices in less than a week, after French supplier EDF Energy hiked gas and electricity bills 22 percent and 17 percent, respectively, on Friday.

The other four are expected to follow suit before the winter. They are RWE-owned nPower, Iberdrola-owned Scottish Power, E.ON UK and Scottish & Southern Energy.

The trend of repeated rounds of price hikes by the main suppliers trying to pass on higher costs was criticised in a report by British members of parliament on Monday, which said the market did not operate efficiently and that it was easy for companies to predict what their rivals were going to do.

CONSUMER HURT