This has sparked outrage amongst numerous companies' customers as they threaten to switch electricity providers to send British Gas a message. Faced with a barrage of outrage, it states that this is the first rise in 4 years, and blames government energy subsidies and the rising price of power transmission.
Policy costs add around 13 per cent to the cost of the average dual fuel bill, paying for the rollout of renewables such as solar and wind, providing a discount for pensioners and funding insulation measures.
Tariff switching firm the Big Deal said its own research suggested British Gas should be cutting bills as the overall costs for energy companies - including wholesale, network and policy costs - have fallen by nine per cent since December 2016.
Centrica took a 224-million pound post-tax impairment charge in the first half of this year related to the Rough field. It is giving a £76 credit to 200,000 vulnerable customers to cushion them from the rise and is holding gas prices at their current level.
The Energy Department spokeswoman added: "We want to see rapid progress on this commitment".
Expectations of a price rise were fuelled by a website blunder by British Gas staff yesterday.
"While this freeze has given people a little respite from price moves over the key high use winter period - the problem is for many the false sense of security that it wouldn't move prices meant they did nothing, when they could've cut their rate, and locked that in for longer, by actively picking a far cheaper 1 year fixed energy tariff".
Mark Hodges, the chief executive of Centrica's consumer business, said the company has made a number of proposals to the government and to regulator Ofgem, including phasing out the standard variable tariff and "levelling the playing field" so all suppliers pay a share of energy policy obligations.
British Gas said it was the first price rise since November 2013 will affect 3.1 million customers.
But Labour said it showed the Government had failed to rein in soaring energy bills, having already watered down its pre-election pledge to cap prices.
In the run up to the June General Election, the Conservatives promised and energy price cap, in a supposed departure from traditional Tory liberal economics which rejects state interference in the market. As these costs increase, large firms argue, that creates a market distortion.
The British government has expressed concern about British Gas's plan to increase electricity prices, arguing that it would hurt low-income people who fail to shop around for the best price.
You can get those off your most recent energy bill.