Household energy costs could soon break through the £1,000-a-year barrier, families were warned yesterday.

The price of gas and electricity is expected to soar by up to 15 per cent as suppliers respond to increases in wholesale prices.  The financial blow will add to the misery of the millions already struggling with high mortgage repayments, rising petrol and food costs and record debts.

The average combined annual cost of gas and electricity is likely to exceed £1,000 for the first time in 2008.

Many will be left in "fuel poverty" - defined as those whose household fuel bills swallow up at least 10 per cent of their income.

British Gas and nPower have already added 15 per cent to tracker tariffs, which are based on wholesale costs and other electricity and gas suppliers are expected to follow.

Typical dual-fuel charges are already £912 a year and the predicted increases would see bills rise to £1,049.

Customers of Scottish Power, the most expensive provider at present, will have to pay more than £1,100.

Typical gas bills would go up from £568 to £653, while electricity charges would rise £50 to £412.

Since February, annual forward gas prices - the amount suppliers pay in advance for energy - for 2008 have risen 42 per cent to 47p per therm, about 10p more than forecast.

Energywatch, the industry's official consumer body, said there was "no justification" for fuel price increases because wholesale costs were still lower than their peak last year and suppliers had still not passed on all the savings to consumers.

A spokesman said: "A year ago 3.5 million households across the UK were in fuel poverty.

"We have reached four million now and every 10 per cent increase in costs adds another 400,000."

Average energy costs for households were last above the £1,000 barrier in the first quarter of this year, following a sustained period of swingeing increases.

British Gas took 17 per cent off in March, with another 3 per cent the following month.

The company, which is Britain's biggest energy supplier with ten million gas and six million electricity customers, made the move after it was deserted by almost a million customers in 2006.

Centrica, which owns British Gas, yesterday said high wholesale prices had cut margins at its residential arm, which made a £553million profit in the first half of the year.

A spokesman said: "The high wholesale prices will, if sustained, create a more difficult environment for retail energy suppliers in the UK going into 2008

"We will continue to monitor this with regard to future pricing policy."

Supplier nPower said gas distribution costs were going up with environmental costs also putting pressure on the industry.

A spokesman said: "We have been swallowing huge amounts of costs but it can't go on indefinitely."

Gas wholesale prices have gone up because they are linked to oil prices.

Electricity prices are affected because gas is used by power stations to generate energy.

Mervyn Kohler, of Help the Aged, said: "Faced with fuel price increases, older people switch their heating down which prejudices their health, and leave hats and coats on in the home or stay in bed longer, which is not good for their quality of life."

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Sources: http://www.thisislondon.co.uk/

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